The biggest social giant Facebook has announced that it will buy mobile messaging service WhatsApp for $19 billion in cash and stock. It is as far a company’s largest acquisition and bigger than any other company has ever done. Facebook is trying everything to boost its market and specially making its hold among youngsters.
Facebook said on Wednesday it will pay $4 billion in cash and about $12 billion in stock in its single largest acquisition, dwarfing the $1 billion it paid for photo-sharing app Instagram.
“This is a bet on the future for Facebook,” Blau said. “They know they have to expand their business lines. WhatsApp is in the business of collecting people’s conversations, so Facebook is going to get some great data.”
WatsApp is a widely used messenger app on Smartphone’s these days and has gained a lot of popularity among youngsters in a short time. This deal will certainly help Facebook to add more users to its network. Facebook will keep WhatsApp seprate as it did with Instagram earlier.
eMarketer analyst Debra Aho Williamson said
“Facebook seems to be in acknowledgement that people are using a lot of different apps to communicate,”.
“In order to continue to reach audiences, younger in particular, it needs to have a broader strategy.not put all its eggs in one basket.”
Mark Zuckerberg said ;
“The right strategy is to continue to focus on growth and product,”
Facebook stock has declined by more than 4.5% in after hours trading following the announcement. The deal has been approved by the boards of both companies and is subject to regulatory approval. Facebook expects the deal to close later this year. This deal will undoubtedly help facebook in getting more users to its website and attract youngsters. WhatsApp will certainly give a good match to facebook’s existing chat and messaging services to provide new tools for our community. Since WhatsApp and Messenger serve such different and important uses, we will continue investing in both and making them each great products for everyone.