Facebook (FB) is paying $4B in cash and issuing $12B in stock (183.9M shares) for WhatsApp. The company is also issuing $3B worth of restricted stock units that vest over four years, leading to a total potential acquisition price of $19B. For reference, Facebook's market cap is currently at $165B.
Facebook states WhatsApp now has 450M MAUs, 70% of whom are active on a given day, and that its messaging traffic is approaching global SMS volumes. Mark Zuckerberg declares the startup, which relies on a phone's contact book to connect users with each other, is "on a path to connect 1 billion people."
Much like Instagram, WhatsApp will maintain a measure of independence from Facebook. Co-founder/CEO Jan Koum will join Facebook's board.
WhatsApp only employed 50 people as of January. The startup has taken a cautious approach to monetizing its service (no ads for now), though it does charge users $0.99/year after providing a year of service for free.
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