Why Facebook Just Paid $19 Billion for a Messaging App
Facebook is buying WhatsApp, agreeing to pay $19 billion in cash and stock for the popular smartphone messaging service.
Revealed today in a filing with the Securities and Exchange Commission, the deal is Facebook’s largest acquisition to date, but it’s just the sort of move the company was expected to make. The social networking giant has been quietly exploring the use of WhatsApp and other messaging services popular among teens, a demographic where Facebook’s influence has begun to wane in recent months. Recently, the company failed in its efforts to acquire another of these teen-centric services, SnapChat, and it has now filled the gap with WhatsApp.
On a recent earnings call, Facebook admitted that teens are spending less time on its service, and a tool like WhatsApp is a way of pushing this trend in the other direction. Facebook offers its own messaging services for smartphones — including a SnapChat clone — but WhatsApp gives it instant access to a new and relatively large group of youngsters who are actively messaging each other on a daily basis. According to Facebook, the service now spans 450 million monthly users, and about 70 percent of those are active on any given day.
