Why WhatsApp Worth $19 Billion?

Facebook made a breathtaking move yesterday, buying messaging app WhatsApp for $19 billion in cash and stock to expand the global footprint of the social networking giant.

It is Facebook’s biggest acquisition and comes less than two years after Mark Zuckerberg’s firm raised $16 billion in the richest tech sector public stock offering.

The purchase includes $12 billion in Facebook shares and $4 billion cash. It calls for an additional $3 billion in restricted stock units to be granted to WhatsApp founders and employees that will vest over four years.

“The acquisition supports Facebook and WhatsApp’s shared mission to bring more connectivity and utility to the world by delivering core Internet services efficiently and affordably,” said a Facebook statement.

Wondering about Whatsapp Revenue Model? Here is a glimpse :

There are merely two ways by which Whatsapp earns money :

1. It is a subscription based service, on iOS platform, one has to purchase the application for 0.99$.

2. The most prominent and the hidden way for whatsapp to earn is BigData.

Let us understand how?

We know that whatever messages we send to our dear ones are being saved on Whatsapp servers. WhatsApp has more than 450 million users and about 1 billion photos and 30 billion messages are sent per day, according to Facebook. In those messages we express our opinions, preferences, likes, dislikes and a lot of things. This unorganized data holds a lot of value for Big Companies. The marketers after sorting this data can make out for your preferences and offer you tailor made offerings. It actually makes a lot of sense to us.

However, Big Data can merely a speculation. It may be or may not be the revenue source as there is no proof available from trusted sources.

Following image will help us understand – Why WhatsApp worth $19 billion?

Whatsapp, Facebook

Whatsapp, Facebook

Reference :
Business Insider

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