Facebook Finalizes $19 Billion Acquisition Of WhatsApp

While Facebook first announced its plans to acquire WhatsApp in February, the final regulatory hurdle has now finally been passed, making Facebook the legal owner of WhatsApp. The massive $19 billion price tag signifies the largest deal in Facebook’s history.

From the time that the acquisition discussions began until now, WhatsApp has continued to run its operation independently. The closing of the deal indicates the beginning of a gradual integration as Facebook provides legal and administrative support to the biggest mobile messaging service in the world, and will likely find new methods to monetize the company. WhatsApp co-founders Jan Koum and Brian Acton had mostly refused venture capital investments up until the acquisition by Facebook, making them instant billionaires with Koum retaining 45% ownership and Acton retaining approximately half of this share. With the final deal now in place, Koum now gets a seat on the Facebook board and will match Zuckerberg’s well known $1 salary.

In this finalized acquisition deal, 177,760,669 shares of Facebook’s Class A common stock and $4.59 billion are being awarded to WhatsApp stakeholders, as well as 45,941,775 in restricted stock. Koum is joining Facebook with no fixed term of employment as part of the deal, but the expectation is that he will stay with the company to work on further development of WhatsApp as a separate brand under the growing umbrella of Facebook.

WhatsApp is currently the most globally diverse messaging service, boasting over 600 million monthly active users from Europe to South America to Asia. Although the price tag of $19 billion may seem excessive, Facebook’s acquisition of WhatsApp makes sense in the social network’s continued drive for expansion throughout the world. While WhatsApp currently makes money by charging $1 for an annual subscription, the expectation is that Facebook will find many new ways to monetize the service.

Digital marketers are taking note of the closing of this deal as it indicates massive possibilities for Facebook to reach new parts of the world that are closely connected to WhatsApp. While it’s still too early to know what directions Facebook will move in based on this acquisition, the one thing that’s certain is that digital marketers will be watching to see if advertising on WhatsApp becomes a viable option in the coming period. If this does come to fruition, there will likely be a shift by marketers to advertise services specifically to areas of the world which they may not have considered as much in the past, and it will be interesting to see exactly what Facebook does with its massive new acquisition. Certainly, based on the $19 billion cost of the deal, Facebook must have some major monetization plans coming soon.