UPDATED 12:35 EDT / OCTOBER 07 2014

Facebook completes Whatsapp acquisition NEWS

Facebook completes Whatsapp acquisition

Facebook completes Whatsapp acquisition

WhatsApp founders Brian Acton and Jan Koum

Facebook, Inc. has completed its $22 billion acquisition of Whatsapp, Inc., according to a report filed with the U.S. Securities and Exchange Commission. The two companies agreed to a deal in February of 2014 but needed to overcome a number of legal obstacles to complete the acquisition.

Whatsapp rose to prominence in 2009 when it introduced its instant messaging app to iOS, Android and other mobile operating systems. The app allows mobile phone users to send SMS-like messages over data and WiFi to anyone with the same app, technology which is very similar to Facebook’s own Messenger app, released two years later. Whatsapp charges $1 per year for its service subscription, which adds up to about $20 million per year in revenue.

As part of the deal, Whatsapp founder Jan Koum will now have a seat on Facebook’s board and receive the same $1 salary that Zuckerberg receives. He will additionally receive $6.8 billion in the deal, and his co-founder Brian Acton will receive $3.5 billion.

Zuckerberg has said he intends to keep offering both Messenger and Whatsapp services. Still, some have expressed concerns that Facebook might simply cannibalize Whatsapp for its technology and then dissolve it, or at the very least start using it for advertising and marketing. Nevertheless, Koum and Zuckerberg say Whatsapp will continue to operate independently.

Facebook has recently made a number of changes to its Messaging Products division, including the hiring of former PayPal CEO David Marcus and the announcement of its plans to introduce a peer-to-peer payment system in Facebook Messenger. Considering the hefty price tag it paid for Whatsapp, Facebook will now be tasked with finding more ways to monetize the popular mobile app.


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