Technology

Facebook to Buy Messaging App WhatsApp for $19bn

Facebook Inc will buy fast-growing mobile-messaging startup WhatsApp for $19 billion in cash and stock, as the world’s largest social network looks for ways to boost its popularity, especially among a younger crowd. The acquisition of the hot messaging service with more than 450 million users around the world stunned many Silicon Valley observers with its lofty price tag.

But it underscores Facebook’s determination to win the market for messaging, an indispensable utility in a mobile era. Combining text messaging and social networking, messaging apps provide a quick way for smartphone users to trade everything from brief texts to flirtatious pictures to YouTube clips — bypassing the need to pay wireless carriers for messaging services.

And it helps Facebook tap teens who will eschew the mainstream social networks and prefer WhatsApp and rivals such as Line and WeChat, which have exploded in size as mobile messaging takes off.

As part of the deal, WhatsApp co-founder and Chief Executive Officer Jan Koum will join Facebook’s board, and the social network will grant an additional $3 billion worth of restricted stock units to WhatsApp’s founders, including Koum.

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