Facebook buys out Whatsapp

whatsapp-messenger‘Are you on WhatsApp?’

For anyone empowered with a smartphone, WhatsApp has become one of the most loved and used applications from the millions of applications already available on the Google Play Store.

The application provides free SMS service for the first year of its usage but charges an annual subscription fee from the user in subsequent years and has a strong foothold in India with approximately 35million Indians dependent on its service. WhatsApp’s popularity can also be accredited to the ease it provides with which users can exchange video, audio and picture messages over an internet connection. WhatsApp is also widely used in Europe and in Latin America as well.

In a recent revelation on Wednesday, Facebook has agreed to buy out WhatsApp for $19billion in stock and cash.

0b13a38b0f534e074c0f6a706700f0e7WhatsApp is only a 55 member company but enjoyed a staggering growth in the past nine months in which the number of users exploded to 450million users. Even Facebook had fewer than 150million users in its fourth year.

Twitter, the microblogging service valued at $30billion enjoys around 240 million users has basically become an underdog in comparison to WhatsApp.

Facebook tried, but failed to buy out Snapchat for roughly $3billion last year. Now with its acquisition of WhatsApp, Mark Zuckerberg will be looking forward to making a big splash in the field of social networking through mobile devices.

But a valid argument behind this statistic probably is the fact that Facebook was initially targeted to be a social networking site with a far larger profiling capability of its users and was initially aimed for larger computing devices.After the hand held device usage boom, Facebook itself went mobile with its own app but it required optimum speeds for smooth usage.

Whereas in WhatsApp user profiling is drastically low but much more attention is stressed on smooth and fast exchange of messages even at low connectivity speeds.

But WhatsApp has remained private since its inception with only 32 engineers and no public relations representatives. WhatsApp also provides utmost privacy to its users as it deletes delivered messages from company services immediately.

WhatsApp has its headquarters in Mountain View and will be functioning independently even after the sell out.

The fact that still remains unclear is the revenue generated by WhatsApp as the company refused to reveal any details. The app comes free of cost but the company charges 99cents in its second year of usage by a customer. The app doesn’t even display advertisements.

But Mark Zuckerberg has commented that according to him adverts are not the appropriate way to moneytize messaging systems. Hence users just might see the subscription fee of the app being elevated from 99 cents.

The acquisition will be of immense support for the WhatsApp team as with this agreement they will be able to utilize Facebook’s resources but function independently all the while. WhatsAppians can look forward to even better services in terms of connectivity, integration of the app across different platforms and with other apps as well.

But privacy concerns will come into play with Facebooks’s knack of collecting user data.

WhatsApp has on the other hand literally secured a security deposit amounting to $2billion if this proposed acquisition fails due necessary approvals.

Facebook announced,”In the event of termination of the merger agreement under certain circumstances principally related to a failure to obtain required regulatory approvals, the merger agreement provides for Facebook to pay WhatsApp a fee of USD 1 billion in cash.”facebook_1601_willow_road

Facebook, which has its head quarters in Menlo Park,will also issue a number of shares of its Class A common stock equal to $1 billion to WhatsApp, it added.

It still remains to be seen whether WhatsAppians will benefit from this corporate deal(if it goes through) or not, but it will surely make Brian Acton and Jan Koum billionaires!

That’s one thing the WhatsApp owners will surely like!!

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