– Facebook Inc will buyout fast-growing mobile-messaging startup WhatsApp for $19 billion in cash and stock, as the world’s largest social network looks for ways to boost its popularity, especially among a younger crowd.
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.
The price paid for Instagram, which with just 30 million users was already considered overvalued by many observers at the time.
Facebook promised to keep the WhatsApp brand and service, and pledged a $1 billion cash break-up fee if the deal falls through.
The deal came from a chat Zuckerberg had with WhatsApp co-founder Jan Koum, whom he described as a “valuable thought partner” and friend of many years.
Koum, who joins Facebook’s board under the deal, said: “WhatsApp’s extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide.”
In a blog post, Koum added: “Almost five years ago we started WhatsApp with a simple mission: building a cool product used globally by everybody. Nothing else mattered to us.”
The tie-up gives WhatsApp “the flexibility to grow and expand,” Koum said.
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