Billionaires emerge: Facebook/WhatsApp link is sealed

Jan Koum (Ukrainian) and Brian Acton (American) have joined the multi-billionaire dollar club after clinching a deal to sell their start up, WhatsApp, to Mark Zuckerberg’s Facebook.

Facebook announced yesterday that it has reached a definitive agreement to acquire WhatsApp, a cross-platform mobile messaging company, for about $16 billion.

The settlement of the price in the Facebook/WhatsApp deal is as follows: $4 billion in cash and approximately $12 billion worth of Facebook shares.  The agreement also provides for an additional $3 billion in restricted stock units to be granted to WhatsApp’s founders and employees that will vest over four years subsequent to closing.

Koum (37) and Acton (44) established WhatsApp in 2009. The instant messaging platform has grown to boast more than 450 million users and aims to reach the 1 billion mark in the short to medium term. WhatsApp is said to currently have about 50 employees.

WhatsApp charges an annual subscription fee of $1 per year but also has a free version which is popular here in South Africa. WhatsApp allow users to dodge SMS charges.

With a subscription of 1$ annual subscription WhatsApp is already a money maker before it can squeeze out other opportunities around its platform. This makes it somewhat different to other social media platforms like Facebook and Twitter who after succeeding in gathering significant eyeballs have had to run around to monetize their platforms.

Facebook said WhatsApp has built a leading and rapidly growing real-time mobile messaging service, with:

  • Over 450 million people using the service each month;
  • 70% of those people active on a given day;
  • Messaging volume approaching the entire global telecom SMS volume; and
  • Continued strong growth, currently adding more than 1 million new registered users per day.

The company added that the acquisition supports Facebook and WhatsApp’s shared mission to bring more connectivity and utility to the world by delivering core internet services efficiently and affordably.  The combination will help accelerate growth and user engagement across both companies.

“WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,” said Mark Zuckerberg, Facebookfounder 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.”

“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.”

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