In a $19bn deal, Facebook has managed to add WhatsApp to its growing portfolio of businesses. The $19bn (£11.4bn) deal has been spread across $4bn in cash and $12bn-worth of shares in Facebook, making it the biggest deal to date for the social network giant.
Mark Zuckerburg, Facebook’s founder, has said that WhatsApp’s services are, “incredibly valuable”. This is no small wonder considering the messaging app has more than 450 million users per month.
The great pull to WhatsApp for users is the undeniably brilliant concept that it enables users to send messages over Internet connections, so evading text messaging costs. While the app offers a free version, it makes some money by requiring a subscription fee of $1 per year after the first year.
Now, with a new Facebook acquisition, as was the case with Instagram, you may expect to see adverts appearing in the not too distant future on WhatsApp, however, the Facebook founder has said that he hasn’t got any plans to do so. Mr Zuckerburg claims that ads are not the most efficient way of making money from messaging systems.
Creative Strategies’ Ben Barjarin, informed BBC Radio 4’s Today programme that Facebook will now be able to gain access to a fast growing market: “WhatsApp is on a path towards a billion users,” he said: “They’re growing exponentially – much, much faster than Facebook.”
“For Facebook this is a key growth area where, even if they don’t monetise this product, this is a way that Facebook can get the next billion smartphone consumers into their ecosystem… to touch them and engage with them in other ways than just the Facebook platform.”
With Facebook shares dropping slightly of late, Mr Zuckerburg will be hoping that this will give them the boost in popularity they need, and giving them plenty of potential for future development.
The deal hasn’t been finalised yet, but since Mr Zuckerburg put in his offer to WhatsApp only 11 days ago, it is clear to say that there isn’t much that he wants that he doesn’t get. With that in mind, Facebook has also reportedly offered to acquire the photo-messaging app, Snapchat for $3bn.