Facebook buys WhatsApp for N3.1 trillion

WhatsApp Co-founder becomes a member of
Facebook’s board.
Social networking giant, Facebook, has bought
messaging app, WhatsApp, in a deal worth a
total of N3.1 trillion in cash and shares.
It is Facebook’s biggest acquisition to date
and will see WhatsApp’s Co-founder, Jan
Koum, become a member of Facebook’s board
of directors.
The deal includes N656 billion in cash and
approximately N1.9 trillion worth of Facebook
shares, plus an additional N492 billion in stock
to WhatsApp’s founders and employees at a
later date.
“We’re excited and honoured to partner with
Mark and Facebook as we continue to bring
our product to more people around the world,”
Mr. Koum said in a statement.
Mr. Koum said he plans to operate the firm
“independently and autonomously”.
In a statement announcing the deal, Facebook
founder, Mark Zuckerberg, described
WhatsApp’s services as “incredibly valuable”,
but insisted he had no plans to place
advertising on WhatsApp’s interface, saying he
did not think ads were the best way to make
money from instant messaging systems.
Mr. Zuckerberg said the quest to buy
WhatsApp was started only 11 days ago.
WhatsApp offers alternative to BlackBerry
chat and text messaging. It allows users to
send messages over internet connections,
avoiding text messaging fees. WhatsApp
claims it is currently registering one million
new users a day and has over 450 million
monthly active users. Facebook believes
WhatsApp will hit a billion users in no time.
It makes money by charging users a
subscription fee of N160 or the equivalent of
$1 per year, after offering the first year for
free.
Once the deal is finalised, Mr. Koum and co-
founder Brian Acton will become Silicon
Valley’s newest billionaires.
WhatsApp started five years ago and has 55
employees in total.