Facebook has agreed to buy mobile messaging service WhatsUp for a premium price of $19 billion in cash and stock, the biggest acquisition in a decade, as the largest social networking company seeks to expand its influence with a younger audience and capture international user growth among mobile users.
Since its beginning in 2009, Whatspp has surged in popularity through its mixture of texting and social networking, gaining over 400 million monthly active users with the majority of its growth coming from international markets where texting plans can be costly.
Whatsapp is free for the first year and then its subscription price moves up to one dollar.
Whatsapp users can send audio messages, photos, and videos.
Several weeks ago, Facebook was unsuccessful in acquiring another messaging startup, Snapchat, for $3 billion as it seeks to gain more influence among the younger generation amid concerns that more teens are not showing as much interest in Facebook.
Following the Whatsapp acquisition, Facebook was downgraded to Equal Weight from Overweight at Evercore Partners while Pivotal Research cut its rating of Facebook to Hold from Buy.