Facebook Buys WhatsApp for $19 Billion

In it’s latest seemingly paranoid billion dollar business deal, Facebook bought WhatsApp for $19 billion, and in doing so, caught the attention of Silicon Valley and the social media world.  Facebook has owned Instagram since 2012, which was purchased for a cool billion dollars, and has attempted to buy Snapchat for an even cooler $3 billion. Snapchat declined the offer, so Zuckerberg set his sights a little higher, on WhatsApp, a mobile messaging app that you can use in place of your wireless carrier’s regular texting service. WhatsApp finds other contacts you have using the app, and lets you message those users all you want without limits or overage charges. At the time of the purchase, WhatsApp has more than 450 million active users, meaning they use the service at least once a month, a conservative number compared to Facebook’s 1.23 billion active users. Over 500 million pictures are shared per day through WhatsApp, about 150 million more than Facebook. It seems as though WhatsApp has grown too large and become too threatening of a competitor for Facebook to leave alone.

As Will Oremus over at slate.com so eloquently put it, Facebook is playing the “world’s most expensive game of Whack-a-Mole.” Mark Zuckerberg can’t simply sit around and let his multi-billion dollar baby fall victim to the Myspace curse (however unlikely that is), instead he must keep his eyes and ears open for any smaller rivals that might pop up.  Data was showing that teens were flocking to apps like Snapchat and WhatsApp which were offering a more intimate messaging approach. WhatsApp has garnered its 400 million plus users in a period of four years, while Facebook, Gmail, Twitter, and Skype had 374 million user after 4 years….COMBINED. The growth rate of WhatsApp alone is enough to make it Mark Zuckerberg’s favorite new shiny multi-billion dollar company to play with.

WhatsApp growth

Still, the question remains, why did Facebook decide to shell out $19 billion, which is about two years of profit for the social media giant? The official reasoning coming from Zuckerberg, of course, is that the goal of the acquisition is to “make the world more open and connected”, and while he may be genuine in his world changing plans, there is always the business side to keep in mind. Realistically, Facebook’s motives for purchasing WhatApp lie within the collection of user generated information that will allow Facebook to access a different realm of social media interaction.

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Lindsey DeMint

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