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WhatsApp: A $19 billion bet for Facebook

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Posted February 20, 2014
WhatsApp: A $19 billion bet for Facebook
This Wednesday, Feb. 19, 2014 photo shows the WhatsApp and Facebook app icons on an iPhone in New York. On Wednesday the world’s biggest social networking company, Facebook, announced it is buying mobile messaging service WhatsApp for up to $19 billion in cash and stock. (AP Photo/Patrick Sison)
Facebook is placing a $19 billion bet on reaching its next billion mobile users with the acquisition of WhatsApp, a popular messaging service that lets people send texts, photos and videos on their smartphones.

The deal is by far Facebook’s largest and bigger than any that Google, Microsoft or Apple have ever done. But it is likely to raise worries that Facebook and other technology companies are starting to become overzealous in their pursuit of promising new products and services, said Anthony Michael Sabino, a St. John’s University business professor.

“I expect there to be a lot of skepticism about this deal. People are going to look at this and say, ‘Uh-oh, did they pay way too much for this?” Sabino said.

The world’s biggest social networking company is taking the long view. WhatsApp has 450 million monthly users, 70 percent of whom use it every day. The service is adding a million new users a day. There are 19 billion messages sent and 34 billion received via WhatsApp each day, in addition to 600 million photos and 100 million video messages.

Read more at: Phys.org

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