Facebook and WhatsApp: Getting the messages

THE rivalries among the tech industry’s giants have often resembled a “Game of Thrones”, in which companies such as Facebook, Google, Amazon and Apple constantly try to invade one another’s online kingdoms. On February 19th Facebook took a dramatic step to defend its turf, saying it would pay $19 billion for WhatsApp, a messaging service that had also attracted the attention of Google and almost certainly other suitors.Even veterans of Silicon Valley goggled at the staggering sum of money changing hands, which comprises a mixture of cash and shares in Facebook. WhatsApp’s price tag is the most ever paid for a venture-capital-backed company and gives a startup founded in 2009 a valuation that is greater than that of household names such as Southwest Airlines and Sony.The deal marks the coming-of-age of messaging apps, which let people send text messages and share photos and other stuff without incurring charges from telecoms firms. WhatsApp is free to use for 12 months and then costs a mere 99 cents a year. Plenty of other such apps have sprung up, including Viber, which Rakuten, a Japanese internet giant, recently bought for $900m, and the immensely popular WeChat…

Link to article: www.economist.com/news/business/21596966-why-mark-zuckerbergs-social-network-paying-such-whopping-sum-messaging?fsrc=rss|bus

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