News Byte: Facebook Buys WhatsApp for $19 Billion

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Facebook spends big bucks on start-up
Facebook spends big bucks on start-up

Facebook recently announced its acquisition of instant messaging start-up WhatsApp for $4 billion in cash and approximately $12 billion worth of Facebook shares. An additional $3 billion in restricted stock units to be granted to WhatsApp's founders and employees that will vest over four years after closing, bringing the total purchase prise to $19 billion. The surprising move is the most expensive acquisition for the company to date, drastically eclipsing the $1 billion Instagram purchase.

WhatsApp boasts 450 million monthly users, with 70% of those users active on a given day, according to a release. The release also notes that about 1 million users register with WhatsApp each day.

The purchase comes amid industry speculation that the social media giant is rapidly losing its younger audience to other services such as Snapchat. 

Alternatively, this acquisition is further evidence of Facebook prioritizing mobile. As of December 31, 2013, Facebook reached more than 945 million mobile monthly active users—a 39% increase over 2012, according to the company's Q4 2013 earnings report.

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