Facebook just bought WhatsApp: here’s why


Spoiler alert: it’s for the advertising.

And boy is Zuckerberg excited…as is all of Twitter.

The amount? $16bn in cash and stock.

“Facebook today announced that it has reached a definitive agreement to acquire WhatsApp, a rapidly growing cross-platform mobile messaging company, for a total of approximately $16 billion, including $4 billion in cash and approximately $12 billion worth of Facebook shares. The agreement also provides for an additional $3 billion in restricted stock units to be granted to WhatsApp’s founders and employees that will vest over four years subsequent to closing.”

Source: Facebook

That’s a lot of cheese. Two weeks ago, I wrote an article debunking a few of the myths around the alleged and imminent demise of Facebook. In it, I drew comparisons with the ‘mobile problem’ that Facebook had in 2012. It knew it had to fix it, and it did; two years later and over 50% of Facebook’s advertising revenue now comes from mobile. If you’ve read any of the trades recently, you’d be forgiven for thinking that Facebook now has a ‘teen problem.’ Today’s purchase is the first step in solving that said problem. Private messaging is the future and, while Facebook has already stated that it will let WhatsApp continue to operate independently post-acquistion (just like it did with Instagram), the advertising potential here is huge. I’ll give it a year before WhatsApp users are offered/asked/encouraged to ‘link’ with their Facebook accounts. And then you know what happens next…  

In a magical world, WhatsApp might not ever serve you ads, but I’m sure as hell its new holding company will use what you talk about in WhatsApp to serve you better ads in Facebook, that’s for certain.