Facebook Finalizes WhatsApp Acquisition – Eight Months After First Announcing It

Chuck Bednar for redOrbit.com – Your Universe Online
Several months after initially announcing plans to acquire messaging service WhatsApp, Facebook has confirmed in a filing with the US Securities and Exchange Commission (SEC) that the multi-billion dollar deal was officially complete.
The social media giant first revealed in February that it would acquire the real-time messaging network in a deal initially reported to be worth $4 billion in cash and $12 billion worth of Facebook shares. In addition, the company said that WhatsApp employees and founders would be given $3 billion in restricted stock units.
It was touted to be the largest Facebook acquisition to date, but in March, privacy groups filed a complaint with the Federal Trade Commission (FTC) claiming the purchase was unfair because WhatsApp users had the expectation that their data would not be collected for advertising purposes.
The FTC approved the acquisition, with the warning that the agency would be monitoring the service for possible privacy violations. European regulators signed off on the deal on October 4, saying that it would not harm competition because consumers would still have plenty of different messaging and consumer communications apps available to them.
According to the Associated Press (AP), the value of the deal increased from the original $19 billion to $21.8 billion in the time since the original agreement was reached. WhatsApp founders Jan Koum and Brian Acton received $6.8 billion and $3.5 billion after taxes, respectively, and Facebook will now award 177.8 million shares of Class A common stock and $4.59 billion in cash to WhatsApp’s shareholders, Forbes Staff Writer Parmy Olson added.
CNET’s Lance Whitney said that WhatsApp would continue operations as a wholly-owned subsidiary of Facebook. Whitney also noted that Koum would become a member of the social media company’s board of directors.
Reuters reporter Alexei Oreskovic explained that the company’s 70 employees would continue working at the company’s Mountain View, California-based headquarters.
“The acquisition… underscores the sky-rocketing values of fast-growing Internet startups, and the willingness of established players such as Facebook and Google Inc. to pay out for them,” Oreskovic said on Monday. “WhatsApp, which has more than 600 million monthly users, is among a new crop of mobile messaging and social media apps that have become increasingly popular among younger users.”
“The price that Facebook was willing to pay raised eyebrows when the buyout was announced Feb. 19, though analysts agreed that landing the popular site made sense,” the AP added. “WhatsApp has been growing rapidly, especially in developing countries like Brazil, India, Mexico and Russia, and now has more than 500 million users.”
WhatsApp allows users to chat with the people on their contacts list, both in one-on-one conversations and in group sessions, according to the wire service. Furthermore, people can use the app to send text messages, photos, videos and voice recordings over the Internet, and even text or call people internationally without accruing heavy charges. WhatsApp is an ad-free service which costs nothing to use for one year, and costs users $1 annually afterwards.
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