Facebook bought WhatsApp. Is it a good buy?

Whatsapp was bought by facebook for a whopping 19 billion dollars. WhatsApp was launched in 2009 by two former employees of Yahoo, Brian Acton and Jan Koum. WhatsApp has been the fastest growing company, it has shown extraordinary growth in the past 5 years. Currently, WhatsApp has more than 450 million users which keep increasing every day. Of this number, 70% users are active on a given day.

The acquisition price includes $4 billion in cash, about $12 billion worth of Facebook shares and $3 billion in restricted stock units to be added to the original price as compensation to WhatsApp’s founders and employees for staying on board at Facebook.

The big question is ‘Was buying WhatsApp a smart move?
Whatsapp Growth Chart

In terms of growth of users, WhatsApp is the fastest growing company in the history.WhatsApp is widely used around the world, it has replaced SMS or traditional text messaging for people. By acquiring a company like WhatsApp, facebook will be able to reach billions of people.

Buying WhatsApp has been a risky move to make. It will either end up being the best decision for facebook or a complete disaster. Although it’s difficult to make money from a messaging app Zuckerberg believes that WhatsApp will prove to be, as he said ‘incredibly valuable.’ That’s why, Zuckerberg nearly doubled Google’s bid for WhatsApp, giving away one-tenth of his company’s market value. Some people took it to twitter to say that Mark Zuckerberg is brain dead.

Although WhatsApp has a promising future we don’t know for sure, how things would turn out.

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