Facebook announced plans to acquire WhatsApp, a cross-platform mobile messaging company, for approximately $19 billion.
The agreement, reached Wednesday, calls for Facebook to pay $16 billion, including $4 billion in cash and approximately $12 billion worth of Facebook shares. It 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.
WhatsApp allows users to send messages over the Internet, bypassing their wireless carrier. More than 450 million people use the service each month, with 70 percent of those people active on a given day.
Facebook said the acquisition supports both companies' shared mission to bring more connectivity and utility to the world by delivering core internet services efficiently and affordably. The combination will help accelerate growth and user engagement across both companies.
"WhatsApp is on a path to connect one billion people. The services that reach that milestone are all incredibly valuable," said Mark Zuckerberg, Facebook founder and CEO.
For retailers and brands, the messaging platform could provide a way to reach younger shoppers active on mobile chat. It's also a compelling platform on which to develop new functionality including mobile payments.
"While we don't expect messaging to be a meaningful near-term or even long-term revenue driver, the real value could be the evolution of the platform to incorporate new functionality such as payments, app distribution, social features ...," Macquarie Equities Research analyst Ben Schachter told Reuters.
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