Facebook To Acquire WhatsApp: Nothing Will Change For Users, Messaging Service CEO Jan Koum Says

Social networking site Facebook announced today it will buy the messaging service WhatsApp for $16 billion. This acquisition supports both Facebook and WhatsApp’s mission to bring more connectivity and utility to the world. The deal was set in $12 billion in Facebook stocks and $4 billion in cash. The social media company also set aside another $3 billion in restricted stock units to be granted to WhatsApp’s founders and employers. These units will vest over the next four years.

A termination fee is attached to the deal that would cost Facebook $1B in cash and $1B in shares if the deal fails to pass regulatory muster. "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. "I've known Jan for a long time and I'm excited to partner with him and his team to make the world more open and connected."

Jan Koum, WhatsApp co-founder and CEO, said, "WhatsApp's extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide. We're excited and honored to partner with Mark and Facebook as we continue to bring our product to more people around the world."

Facebook released a statement explaining the new acquisition:

“Facebook fosters an environment where independent-minded entrepreneurs can build companies, set their own direction and focus on growth while also benefiting from Facebook’s expertise, resources and scale. This approach is working well with Instagram, and WhatsApp will operate in this manner. WhatsApp’s brand will be maintained; its headquarters will remain in Mountain View, CA; Jan Koum will join Facebook’s Board of Directors; and WhatsApp’s core messaging product and Facebook’s existing Messenger app will continue to operate as standalone applications.”

Koum added to it in a post on the WhatsApp blog:

“WhatsApp will remain autonomous and operate independently. You can continue to enjoy the service for a nominal fee. You can continue to use WhatsApp no matter where in the world you are, or what smartphone you’re using. And you can still count on absolutely no ads interrupting your communication. There would have been no partnership between our two companies if we had to compromise on the core principles that will always define our company, our vision and our product.”