Dive Brief:
- Facebook has purchased the globally popular messaging app WhatsApp for $16 billion in cash and stock — 16 times what it paid for photo sharing platform Instagram.
- WhatsApp's value lies in its global user base, which exceeds 400 million monthly active users. And 70% are active on any given day.
- CEO Mark Zuckerberg said he expects WhatsApp to reach a billion users and that the investment gives Facebook a hold in both social messaging and the SMS replacement arena.
Dive Insight:
Hearing that Facebook shelled out $16 billion is a bit shocking upon first read. It seems hard to believe a messaging app would be worth 16 times what Instagram was worth. The app does have an impressive global user base, though, and that will undoubtedly come into play once plans to monetize the app are revealed.
