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Facebook to Buy WhatsApp, a Messaging Start-Up, in a  Billion Deal - NYTimes.com

If you thought the $1B price tag to acquire Instagram was steep, lay your eyes on this “little” acquisition announced last night by Facebook. It will be buying the quietly popular cross-platform IM company WhatsApp for $16B. If you’re unfamiliar, the service offers robust cross-network and cross-device SMS/MMS, etc. without advertising of any kind, first year free and then just a dollar a year thereafter. With roughly 450,000,000 user worldwide and little-to-no revenue to speak of, some are questioning why Facebook is paying so much. The deal will consist of $4B in cash and $12B in stock. If restricted stock to the employees is icing, the deal will top $19B.

The move points to a few interlaced strategies. First up, instead of simply building every piece of functionality it can into FB, having a suite consisting of Insta, WhatsApp, et. al, is a smart play. Also, feeding FB’s need to grab every user across the globe and get them involved in their services is accomplished as well. Finally, the additions to FB Messenger and this acquisition are a huge acknowledgement that Facebook missed the first ferry in the IM wave. Money was clearly no object here, and revenue is a not a driver, rather user-base.

*Juicy little scoop: Google apparently made a bid for $10B…

Facebook to Buy WhatsApp, a Messaging Start-Up, in a $16 Billion Deal – NYTimes.com.

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