Facebook is betting huge on mobile with an eye-popping cash-and-stock deal worth up to $19 billionfor Internet Age smartphone messaging service WhatsApp.
The surprise, mega-deal announced on Wednesday bolsters the world's biggest social network - which has more than 1.2 billion members - with the 450-million-strong WhatsApp, which will be operated independently with its own board.
WhatsApp was founded in 2009 by American Brian Acton and Ukrainian Jan Koum. The acquisition represents quite a turnaround for the duo, who both formerly worked at Yahoo. Before deciding to go on their own and start WhatsApp, it seems Acton was rejected for jobs at Facebook and Twitter.
Koum, who joins Facebook's board under the deal, said: "WhatsApp's extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide."
In a blog post, Koum added: "Almost five years ago we started WhatsApp with a simple mission: building a cool product used globally by everybody. Nothing else mattered to us."
The tie-up gives WhatsApp "the flexibility to grow and expand," Koum said.
The acquisition represents likely the biggest-ever price for a tech startup, trumping the $8.5 billion paid for Skype - which allows users to make voice and video calls over the Internet - by Microsoft in 2011.
"The size of this deal is really massive and it will get people talking about a bubble," Greg Sterling at Opus Research told AFP.
Written with inputs from AFP
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