Facebook (FB) is set to buy the mobile messaging app firm WhatsApp for $19 billion. The Wall Street Journal reports this is the largest-ever buyout of a company backed primarily by venture capital.
What is WhatsApp?
WhatsApp acts as an alternative to text messaging. The app lets users send photos, videos and audio messages, as well as share their location using their phone’s built-in GPS. WhatsApp counts more than 450 million worldwide active monthly users, and The Guardian reports that number grows by a million people per day.
The app features a 365-day trial for users, and, after that year is up, it charges $1 per year. WhatsApp, with only 55 employees, has a strict no-advertisement policy.
“From the day we started the company, we always felt that doing advertising in our product would be a very wrong thing to do,” Jan Koum, co-founder and CEO of WhatsApp said earlier this year.
Over 19 billion messages and 600 million photos are sent daily on the mobile messaging app, an increase of almost 100% from last summer.
Facebook’s changing landscape
The $19 billion deal follows Facebook’s $1 billion purchase of the photo and video sharing app Instagram and its $3 billion failed attempt last year to buy Snapchat.
The latest deal is targeted at the shifting “Generation Z,” the main consumers using WhatsApp daily.
“WhatsApp is on a path to connect one billion people. The services that reach that milestone are all incredibly valuable,” Facebook CEO Mark Zuckerberg said in a statement.
Both Zuckerberg and WhatsApp’s Koum are scheduled to appear at Mobile World Congress next week in Barcelona, Spain, as keynote speakers.
