Facebook Buys WhatsApp for $19b

Facebook hopes to remain at the top of the social media food chain purchasing the fast growing messaging start-up WhatsApp for $19 billion in cash and stocks. The price tag to acquire WhatsApp has stunned many in Silicon Valley, as Facebook continues it's struggle to win the market of mobile messaging. This move ultimately is an attempt to keep Facebook cool with teens, hoping to deter them from jumping on to other alternative social and messaging networks that their parents aren't on. Messaging apps has been taking the world by storm and according to Facebook co-Founder Mark Zuckerberg, WhatsApp is currently gaining about a million users per day.

Zuckerberg wrote on his Facebook page that he believes: "WhatsApp will complement our existing chat and messaging services to provide new tools for our community," adding that: "WhatsApp and (Facebook) Messenger serve such different and important users, we will continue investing in both." Facebook is king when it comes to hosting content, but are still along way from fully figuring out how to control communication. As part of the deal, WhatsApp co-founder and CEO Jan Koum will join Facebook's board and will gain an additional $3 billion worth of restricted stock.

It sounds like a ridiculously good deal for WhatsApp, especially considering that Facebook acquired Instagram for a measly one billion dollars which, at the time, had analyst again scratching their heads. As part of the deal, Facebook has promised to keep the WhatsApp brand and service and pledged a billion dollars in cash as a break-up fee if the deal falls through.