N4BB

Facebook announced today they plan to acquire WhatsApp for $19 Billion. According to the filing, that’s $12 Billion worth of Facebook shares at a 6 day average, $4 Billion in cash, and $3 Billion worth of Facebook shares to WhatsApp employees.

This literally is about 19x what Facebook paid for Instagram. Facebook gave the following reasons for wanting to purchase WhatsApp:

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  • Over 450 million people using the service each month;
  • 70% of those people active on a given day;
  • Messaging volume approaching the entire global telecom SMS volume; and
  • Continued strong growth, currently adding more than 1 million new registered users per day.

Lets put this in comparison to the latest known BBM stats:

  • More than 100 million active users each month (BlackBerry 10, iOS, and Android)
  • More than 51 million daily active users who are connecting with friends or colleagues an average of one and a half hours every day.
  • BBM users send and receive more than 10 billion messages each day, nearly twice as many messages per user per day as compared to other mobile messaging apps
  • Almost half of BBM messages are read within 20 seconds of being received; indicating how truly engaged BBM customers are

Even though WhatsApp is about 4x larger than BBM, an acquisition such as this can only more highly position mobile messaging apps. This is why, as of this writing, BlackBerry shares have seen an 8 per cent boost in after market.

It will be very interesting to see what the valuation of BBM could be valued by some. Though, the bigger players with such cash reserves already have theirs – Google with Google+, Apple with iMessage, and so on. But, so did Facebook.