Facebook's $21.8 Billion Whatsapp Grab , Lost $138 Million Last Year
BENGALURU: According to a filing report with the Securities and Exchange Commission, WhatsApp’s merger with Facebook costing up to $10.2 million in revenue last year came from charging some users $1 a year to use the mobile application which allowed users to send text messages and images as WhatsApp does not allow advertising on it, as reported by the Times of India.
Apparently, to get the revenue, WhatsApp spent heavily. Research and development at the startup had employed just 55 people at the time it was sold, totaling it to $77 million. The General and administrative costing upto $18.6 million, which in total amounts to about $149 million last year resulting in a net loss of $138 million. This exceeds the net loss which was reported in 2012 with $55 million.
Facebook offered $4 billion in cash and $12 billion in stock with the company's founders being eligible for an additional $3 billion in restricted stock. But on the other hand, Facebook's own stock continued to rise with the value of the deal, and final reports coming in at $21.8 billion.
The Acquisition of WhatsApp was never about making money, it was just that Zuckerberg was attracted by the company's 450 million users at the time of purchase. Thinking about further growth, Zuckerberg explains that the "Services in the world that have 1 billion people using them are all incredibly valuable," However, though WhatsApp's users may be important to Zuckerberg, looking at the money spent, will take some time for the company to get back its purchase price.