Last Updated on August 18, 2022
Facebook Inc. (FB), the world’s largest social network, agreed to acquire mobile-messaging startup WhatsApp Inc. for as much as $19 billion in cash and stock, seeking to expand its reach among users on mobile devices.
Earlier this week, Rakuten Inc., the Japanese online retailer controlled by billionaire Hiroshi Mikitani, agreed to buy the Viber instant messaging and calling service for $900 million. At that price, Rakuten is paying $3 for each of Viber’s 300 million users, while Facebook is paying as much as $42 for each of WhatsApp’s.
The WhatsApp purchase would be the biggest Internet deal since Time Warner’s $124 billion merger with AOL in 2001. The accord includes $12 billion in stock, $4 billion in cash and $3 billion in restricted shares, Facebook said today in a statement. WhatsApp has more than 450 million members, with 1 million users being added daily.
Unlike traditional text messages, which consumers pay for through their mobile-phone plans, WhatsApp is free for the first year, and costs 99 cents a year after that. It also competes with Tencent Holdings Ltd.’s WeChat in China, KakaoTalk in Korea and Line in Japan, as well as Facebook’s own application, Facebook Messenger. Whereas Viber is a completely free messaging plus calling application that is yet to be monitized execpt for recently launched Viber Out feature that enables you to call mobile phones at affordable rates.
With the recent purchase of messaging apps by internet giants, the power of messaging and online calling is going to shift in a big way. More acquisition to follow soon. Who knows it could be Google.
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