Facebook buying messaging app WhatsApp for $19B

This Wednesday, Feb. 19, 2014 photo, shows the WhatsApp and Facebook app icons on an iPhone in New York. On Wednesday Facebook announced it is buying mobile messaging service WhatsApp for up to $19 billion in cash and stock. (AP Photo/Karly Domb Sadof)

Facebook has bought mobile messaging service WhatsApp for $19 billion in cash and stock. 

This is the company’s largest purchase, bigger than any that Google, Microsoft, or Apple has ever done.

The world’s biggest social networking company said Wednesday that it is paying $12 billion in Facebook stock and $4 billion in cash for WhatsApp. In addition, the app’s founders and employees – 55 in all – will be granted restricted stock worth $3 billion that will vest over four years after the deal closes.

The deal translates to roughly 11 percent of Facebook’s market value. In comparison, Google’s biggest deal was its $12.5 billion purchase of Motorola Mobility, while Microsoft’s largest was Skype at $8.5 billion. Apple, meanwhile, has never done a deal above $1 billion.

The deal’s price tag stunned Gartner analyst Brian Blau. “I am not surprised they went after WhatsApp, but the amount is staggering,” he said.

Facebook likely prizes WhatsApp for its audience of teenagers and young adults who are increasingly using the service to engage in online conversations outside of Facebook, which has evolved into a more mainstream hangout inhabited by their parents, grandparents and even their bosses at work.

Facebook’s new acquisition also has a broad global audience. Facebook CEO Mark Zuckerberg said the service “doesn’t get as much attention in the U.S. as it deserves because its community started off growing in Europe, India and Latin America. But WhatsApp is a very important and valuable worldwide communication network. In fact, WhatsApp is the only widely used app we’ve ever seen that has more engagement and a higher percent of people using it daily than Facebook itself.”