In a previous article, Rumor Has it That College Age Adults Are Flocking Away From Facebook, we find the Facebook has been losing quite a bit of their younger demographic.
Breaking into the mobile messaging space, Facebook announced that they have reached an agreement to purchase the five-year-old start-up, WhatsApp, a proprietary, instant messaging company.
The deal roughly breaks out to $4 billion in cash and $12 billion in stock for the company—plus $3 billion in restricted stock units that will go to vested WhatApp employees. Additionally, WhatsApp co-founder and CEO Jan Koum will join Facebook’s Board of Directors, although the company will continue to operate independently and retain its brand.
You can see the appeal that WhatsApp would have to Facebook, with its current 450 million monthly users, and its continued growth of 1 million new registered users per day. (70 percent, of which, actively use it daily.) Furthermore, they have a high user base in Latin America, India and Europe. With these model attributes, this investment solidifies Facebook’s foothold in the mobile market.
Jan signs WhatsApp/Facebook paperwork at the welfare office where he got his food stamps as a teen.
"WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable," said Mark Zuckerberg, Facebook founder and CEO, said in an announcement. While from co-founder and CEO, of WhatsApp, Jan Loum, said, “Here’s what will change for you, our users: nothing.”
There are a lot of questions brewing with the announcement of this acquisition. We’d love to hear your thoughts. Do you think this was a smart purchase for Facebook? How do you think this will impact the consumer-tech industry?
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