The mobile-messaging startup was “a great fit for us,” Zuckerberg said at the Mobile World Congress in Barcelona yesterday. “Already almost half-a-billion people love using WhatsApp for messaging and it’s the most engaging app we’ve ever seen exist on mobile by far.”
The cash-and-stock acquisition would be the biggest by Facebook, the world’s largest social network, and the most expensive for an Internet company in more than a decade. The deal gives WhatsApp roughly the same valuation as Gap Inc. and more than half the market value of microblogging service Twitter Inc.
Zuckerberg, who also bought photo-sharing service Instagram for about $700 million in 2012, has been adding applications such as messaging and news to court smartphone and tablet users.
The WhatsApp deal will help Facebook play a more important role in getting more people connected, Zuckerberg said.
Mountain View, California-based WhatsApp, which is popular in Europe, lets users send messages through its service on mobile devices based on different operating systems including Apple Inc.’s iOS, Google Inc. (GOOG)’s Android, Microsoft Corp.’s Windows Phone and BlackBerry Ltd.’s software.
Unlike traditional text messages, which consumers pay for through their mobile-phone plans, WhatsApp is free for the first year, and costs 99 cents a year after that. It also competes with Tencent Holdings Ltd.’s WeChat in China, KakaoTalk in Korea and Line in Japan, as well as Facebook’s own application, Facebook Messenger.
While Zuckerberg declined to comment when asked whether he would make a bid for Snapchat, he said that after a large deal such as WhatsApp, “you’re probably done for a while.”
While WhatsApp had low revenues, it would be worth more because of its strategic value, huge business potential to double its users and its fit with Facebook.
Zuckerberg also said he’s seeking three to five phone companies as partners in an effort to connect billions of people to the Internet that don’t yet have access.
Carriers joining the initiative would roll out networks and provide data service for free to people who can’t afford it, he said. That would provide services including social networks, messaging, food and weather information that could eventually bring in revenue for carriers and Internet companies.
“I want to show that this model works, that’s why we’re looking for partners who are serious about this,” he said. The undertaking will probably be loss-making for years. “If we do something that’s good for the world, we’ll eventually come up with a way to make money from it.”
Last August, Facebook said it’s forming Internet.org, a group with other technology companies to expand access to the Internet for the 5 billion people who have yet to get online. The group includes partnerships with mobile-device makers Samsung Electronics Co. and Nokia Oyj (NOK1V), and chipmaker Qualcomm Inc. (QCOM) The group, which follows Facebook’s own efforts to expand Internet access in emerging markets, intends to develop projects and mobilize industry and governments to enable more people to move online.
Zuckerberg said concerns about data security and government intervention should not affect growth of the Internet.org initiative.
“The governments have a responsibility to protect folks and also to be transparent about what they are doing,” he said. “I think they were way over the line in not being transparent enough.”
Facebook rose 0.2 percent in German share trading today to the equivalent of $71.03 as of 9:53 a.m. in Frankfurt.
To contact the reporter on this story: Cornelius Rahn in Barcelona at email@example.com