The Telegraph
Thursday , February 20 , 2014
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Facebook buys WhatsApp in $19bn deal, pledges to keep it advertisement-free

New York, Feb 20 (Agencies): Social media giant Facebook will acquire mobile messaging company WhatsApp for $19 billion in a cash and stock deal aimed at giving Facebook access to new users, especially teens who shun mainstream social networks.

Under the agreement, WhatsApp co-founder and CEO Jan Koum will join Facebook’s board of directors. Facebook said the acquisition will not impact the WhatsApp's brand, which will be maintained and the company's headquarters will remain in California's Mountain View.

The deal provides Facebook entree to new users, including teens who eschew the mainstream social networks but prefer WhatsApp and rivals, which have exploded in size as private messaging takes off.

WhatsApp's core messaging product and Facebook's existing messenger app will continue to operate as standalone applications.

“WhatsApp is on a path to connect one billion people. The services that reach that milestone are all incredibly valuable,” Zuckerberg said. “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.”

WhatsApp, which will continue to operate independently, has built a leading and rapidly growing real-time mobile messaging service with over 450 million people using the service each month. Of this number, 70 per cent users are active on a given day.

The messaging volume of WhatsApp is approaching the entire global telecom SMS volume and the company is currently adding more than one million new registered users per day.

Koum, an Ukrainian immigrant and a college dropout, co-founded WhatsApp in 2009 with Brian Acton. Both are former Yahoo executives. WhatsApp had received about $10 million in funding two years after it was founded.

Facebook's most recent acquisition attempt failed when Zuckerberg tried to acquire SnapChat last year but SnapChat turned down the offer.

In a blog post, Koum said he would not have agreed to the partnership with Facebook if WhatsApp would have had to ”compromise” on the core principles of the company. The deal would give WhatsApp the flexibility to grow and expand and noted that users of the service will not experience any change in usage.

“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,” he said.

WhatsApp was the leader among a wave of smartphone-based messaging apps that are now sweeping across North America, Asia and Europe.

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