Facebook really wanted to buy a popular messaging app. Spurned by Snapchat, the network set its sights a little — OK, a lot — higher, buying wildly successful over-the-top messenger WhatsApp for US$16 billion.
Poor Snapchat. It could’ve been you.
WhatsApp will join Facebook’s roster of apps, but will remain independent, as Instagram has since Facebook snapped it up in 2012 for a paltry US$1 billion. In a Wednesday press release announcing the purchase, Facebook said it will continue to run its stand-alone Messenger app, though it’s unclear whether the company will try to marry the two services down the line.
WhatsApp is a bigger catch than Snapchat, which perhaps justifies the insanely high price tag. (Remember, Snapchat turned down a US$3 billion offer from Facebook.) The app has 450 million monthly active users, 70 percent of whom use the app every day. WhatsApp says it’s adding one million new users a day. The app’s users share more than 400 million photos daily at last count, a number which has likely grown. That’s more than Snapchat’s 400 million images and Instagram’s 55 million. That’s even more than the 350 million photos shared on Facebook each day and, considering that the social network has more than double the user base of WhatsApp, that’s pretty impressive.
WhatsApp is also hugely popular overseas. The Guardian estimated that the app was installed on 95 percent of all smartphones in Spain and more than 50 percent of phones in the UK. The app is also big in Latin America, Asia and other markets that Facebook wants to compete in. WhatsApp has taken a cross-platform approach to grow internationally, with apps for iOS, Android, Windows Phone and even BlackBerry. WhatsApp’s offerings are free, and it has no ads. Yet.
Facebook is shelling out US$4 billion in cash and US$12 billion in stock for the app, pending regulatory approvals. If the merger doesn’t work out, Facebook has to pony up US$1 billion in cash and another billion in stock.
by Caitlin McGarry, TechHive