Facebook has agreed to buy messaging company WhatsApp for $US19 billion ($US4 billion in cash, the balance in shares) – a record for a company backed by venture capital investors.
The 55-employee WhatsApp offers a service that lets people send messages from their smartphone over the internet, avoiding phone company txt message charges.
The privately held company claims that over the past year nine months, its service has doubled to 450 million monthly users.
On a conference call with media and analysts today, Facebook CFO's said 70% of WhatsApp users are active each day.
WhatsApp competes with a number of services that allow smartphone users to use the internet instead of the traditional phone network for calls, video chat and messaging, including Skype (bought by Microsoft for $US8.5 billion in 2010), Apple's iMessage service for iPhones, Viber, and Google's HangOut and other services.
Facebook says it will allow WhatsApp to keep its own identity, and branding. Currently, a core part of its identity is that it's a ad-free service, no cost service (or at least very low-cost. WhatsApp is free to download and try for the first year. After, you have the option of extending your subscription for $US0.99 per year).
But the social network is paying around $US40 a user for WhatsApp; odds are that something will change.
The National Business Review
