Facebook to buy WhatsApp for $19bn

February 20, 2014

New York, Feb 20: Facebook has bought messaging app WhatsApp in a deal worth a total of $19bn (£11.4bn) in cash and shares.

It is the social networking giant's biggest acquisition to date.

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WhatsApp has over 450 million monthly users and is popular with people looking to avoid text messaging charges.

In a statement announcing the deal, Facebook founder Mark Zuckerberg described WhatsApp's services as "incredibly valuable".

WhatsApp allows users to send messages over internet connections, avoiding text messaging fees. The company claims it is currently registering one million new users a day.

It makes money by charging users a subscription fee of $1 per year, although it offers a free model as well.

The deal gives Facebook access to the 450m people who use WhatsApp's service every month, effectively turning one of its biggest potential threats into a valuable ally.

It will also help Facebook cement its position at the heart of users' lives, and will reinforce its standing with younger users, who have been drifting away from the social network in favour of WhatsApp and other instant messaging services.

Mark Zuckerberg, Facebook's founder and chief executive, said the two companies would work together “to make the world more open and connected”. “WhatsApp is on a path to connect 1bn people. The services that reach that milestone are all incredibly valuable.”

Jan Koum, the Ukranian chief executive and co-founder of WhatsApp, added that he was “excited and honoured” to be joining Facebook. "WhatsApp's extremely high user engagement and rapid growth are driven by the simple, powerful and instantaneous messaging capabilities we provide.”

The two men have known each other for years, but only began discussing the deal 12 days ago. The settled it for $19bn, including $4bn in cash, $12bn in Facebook shares and $3bn in restricted stock awards for WhatsApp's founders and employees.

Facebook has also agreed to pay WhatsApp a $2bn break free - half in cash, half in shares - if the deal falls foul of regulatory hurdles. Mr Koum, who co-founded the company with Brian Acton, whom he met when they were both working at Yahoo!, will join the Facebook board.

Mr Zuckerberg said Facebook would allow WhatsApp to continue operating as an independent service, in much the same way it has done with Instagram, the photo messaging service it bought for $1bn in 2012.

He added that Facebook would allow WhatsApp to focus on growing its user base, rather than squeezing money out of its existing subscribers. At the moment, the company makes money from the 99 cent fee it charges users who want to download its app, and a subsequent 99 cent-a-year usage fee.

The deal immediately raised fears that Facebook would introduce adverts to WhatsApp, but Mr Zuckerberg said on Wednesday evening that he does not "personally think ads are the right way to monetize messaging systems”.

The deal comes as a major blow to Google, which reportedly made a $1bn bid for WhatsApp last year.

It also casts Facebook's previous transactions in a new light. Analysts were stunned when the social network paid as much as $1bn for Instagram, but that figure is dwarfed by the sum it has paid for WhatsApp.

Shares in Facebook fell 5pc in after-hours trading in New York, amid fears that the company had overpaid.

However, the news gave a 7pc boost to BlackBerry shares, as investors bet on Google, or another of Facebook's competitors, trying to buy its valuable BBM instant messaging service.

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News Network
November 19,2024

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In the wake of the tragic drowning of three students at a resort near Ullal on the outskirts of Mangaluru city, the tourism department in Dakshina Kannada is set to implement comprehensive safety guidelines for properties with swimming pools or beach access. This initiative aims to ensure guest safety and prevent similar incidents in the future.

New Safety Mandates for Resorts and Homestays

Rashmi S.R., deputy director (in-charge) of the tourism department, announced, “We will instruct all homestays and resorts to enforce precautionary measures, especially those with pools or direct beach access. Properties must ensure 24/7 supervision, particularly during guest hours. This tragedy highlights the importance of having trained personnel on-site.”

Key Safety Guidelines

The district, home to around 150 homestays and 130 resorts, will see the following measures enforced:

  • Clearly displaying pool depths.
  • Installing adequate safety equipment, such as life buoys.
  • Employing trained lifeguards at all times.
  • Establishing clear pool operating hours.
  • Reviewing and implementing standard operating procedures (SOPs) for pool and beach usage.

Booming Beach Tourism Calls for Vigilance

Manohar Shetty, president of the Association for Coastal Tourism (ACT), Udupi, highlighted the growing popularity of beachside resorts, particularly during peak seasons. Properties in Udupi, often fully booked with tourists from Bengaluru, Mysuru, Kodagu, and Shivamogga, face increasing pressure to maintain safety standards.

Udupi district boasts 22 beachside commercial properties catering to this rising demand.

Shetty emphasized, “Authorities must scrutinize safety measures and carefully evaluate guidelines before issuing new resort licenses. Panchayats should rely on the Karnataka Town and Country Planning Act when handling such cases.”

Long-Term Solutions for Water Safety

Recognizing the need for a cultural shift in water safety, Shetty proposed integrating swimming lessons into school curricula. This move would not only equip students with essential skills but also encourage safe participation in water-based activities.

A Safer Tomorrow for Coastal Tourism

As the tourism sector thrives, Mangaluru’s proactive approach underscores its commitment to visitor safety. The tragic incident serves as a wake-up call, propelling the industry towards stricter regulations and better preparedness, ensuring that coastal vacations remain both enjoyable and safe.

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News Network
November 5,2024

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Bengaluru: In a major legal twist, an FIR has been filed against Union Minister H.D. Kumaraswamy, his son Nikhil Kumaraswamy, and their close associate Suresh Babu. The trio is accused of threatening a senior IPS officer and making false allegations against him. The FIR, registered by the Sanjaynagar police, follows a complaint by Additional Director General of Police (ADGP) M. Chandrasekhar, who heads the Special Investigation Team (SIT) under the Karnataka Lokayukta.

Allegations Against Kumaraswamy
The crux of the case revolves around ADGP Chandrasekhar's investigation into Kumaraswamy's alleged illegal approval of a mining lease to Sri Sai Venkateshwara Minerals (SSVM). Kumaraswamy, currently serving as Union Minister for Steel and Heavy Industries, has been accused of bypassing legal procedures in favor of SSVM, prompting Chandrasekhar to seek the Karnataka Governor's approval to pursue legal action.

In response, Chandrasekhar claims that Kumaraswamy lashed out publicly. On September 28 and 29, the former Karnataka Chief Minister held press conferences, accusing the officer of bribery, misuse of medical records, and personal misconduct. According to the ADGP, Kumaraswamy also issued a threat of transferring him to another cadre outside Karnataka.

Nikhil and Aide Suresh Babu Involved
Kumaraswamy’s son Nikhil Kumaraswamy is also implicated in the controversy. On September 29, Nikhil allegedly echoed his father’s accusations against Chandrasekhar. The third individual named in the FIR, Suresh Babu, a close aide to Kumaraswamy, is accused of escalating the issue by writing a letter to the Karnataka Chief Secretary. This letter, containing further allegations, was made public on social media, adding to the pressure on the senior officer.

Legal Action and Charges
Though Chandrasekhar's complaint was filed in October, formal legal proceedings began on November 4 after securing approval from the 42nd Additional Chief Metropolitan Magistrate (ACMM). The charges include Section 224 (threat of injury to a public servant) of the Bharatiya Nyaya Sanhita (BNS). A police source familiar with the case confirmed the charges.

ADGP Chandrasekhar's Response
In a strong rebuttal, ADGP Chandrasekhar addressed his team and the media, branding Kumaraswamy as an accused person trying to intimidate the SIT. He emphasized that these attacks were intended to undermine his officers' morale and interfere with the investigation.

“An accused, no matter how powerful, remains an accused. This attempt to instill fear in the minds of officers is meant to hinder justice," Chandrasekhar said in a written statement. Referring to Kumaraswamy, he added, "This accused, who is currently out on bail, has resorted to such tactics to shake our resolve."

Quoting Shaw to Drive the Point Home
In a dramatic conclusion, Chandrasekhar cited playwright George Bernard Shaw, saying, “Never wrestle with pigs. You both get dirty, and the pig likes it,” signaling his intent to remain unshaken in the face of public accusations and personal threats.

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News Network
November 13,2024

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In the heart of Mangaluru, where rising air pollution is spurring public health worries, voices are calling for a greener, cleaner shift in the city’s public transport. Leading this call is APD Foundation, a Mangaluru-based environmental NGO, which has urged Forest, Ecology, and Environment Minister Eshwar Khandre to mandate electric vehicle (EV) adoption in public transport.

Abdullah A Rehman, CEO of APD Foundation, emphasized in a formal letter to the minister that Mangaluru’s public transportation system—efficient and organized with both government and private players—could transition smoothly to EVs in stages. He suggested that government-backed financial incentives, partnerships with EV manufacturers, and collaborations with environmental groups could streamline the switch.

Rehman stressed the potential of EVs to cut down emissions, enhance air quality, and reduce noise levels, noting the quieter operation of electric buses. He confirmed that a copy of his letter was submitted to the Deputy Commissioner as well.

However, Dilraj Alva from the Dakshina Kannada City Bus Association noted potential challenges, explaining that the shift might take up to two years due to infrastructure and budget hurdles. Most EV buses, he explained, are procured through aggregators, not directly by individual operators. The addition of charging stations and other essential infrastructure further complicates the transition.

Alva also raised the economic concern: while diesel buses are priced between ₹30-40 lakh, electric buses can cost up to ₹1 crore. Reflecting on recent meetings with companies, including one in Manipal, he questioned the assumption that EVs are an absolute solution to pollution. “EVs aren’t entirely eco-friendly, especially when considering battery disposal,” he cautioned.

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