WhatsApp to Start Offering Internet Phone Calls-News-NY-Times

Major announcements from WhatsApp, the Internet messaging services, are like city buses: You can wait a long time for one, then two show up at once. On the heels of its $16 billion deal to be bought by Facebook, WhatsApp announced on Monday that it would start offering free voice services later this year — diversifying beyond its main messaging service into phone calls. Speaking at the Mobile World Congress conference in Barcelona, the tech company’s chief executive, Jan Koum, said users in the second quarter would be able to make Internet calls through their smartphones similar to services that are already available on rival Internet messaging offerings like Kakao of South Korea and Viber of Cyprus.

WhatsApp’s voice service is expected to be available first on Google’s Android and Apple’s iOS operating systems, then expand to others like Windows Phone and Blackberry, he added. Mr. Koum, who was born in Ukraine before moving to the United States as a teenager, also said on Monday that WhatsApp would launch a mobile brand in a partnership with the German cellphone carrier E-Plus. The WhatsApp chief executive said the mobile brand would initially be available only in Germany, though he did not provide any more specifics on the product, which is expected to be launched by the end of the year.

“The world is moving to data very quickly,” Mr. Koum said in a speech. “Data is the next generation in what is driving the mobile industry.” WhatsApp’s push to offer its 465 million monthly users Internet voice calls is the first announcement since Facebook agreed to buy the San Francisco-based tech company last week for $16 billion. The final price may rise to $19 billion with WhatsApp employees and founders receiving an additional $3 billion in restricted stock, which would vest over the next four years. Currently, the messaging service has more than 40 million users in India, and 38 million in Brazil, according to the company. The start-up also has 31 million users in Germany, though it did not provide numbers on its American user base. Mr. Koum played down rumors that the deal with Facebook would lead to major changes to how WhatsApp operates, including the potential addition of advertising and other revenue-generating services. 

“For WhatsApp to be successful, it has to stay independent,” Mr. Koum said on Monday. “There are no planned changes.”

By expanding into voice, WhatsApp is going head-to-head with the likes of Skype and traditional cellphone operators like AT&T and Deutsche Telekom. Analysts say the move also could lead Facebook to revamp its own mobile offerings, which have centered on software called Home that has won few fans since launching last year. 

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Facebook to buy mobile messaging app WhatsApp for $19 billion-News-TOI

Facebook Inc will buy fast-growing mobile-messaging startup WhatsApp for $19 billion in cash and stock, as the world’s largest social network looks for ways to boost its popularity, especially among a younger crowd. The acquisition of the hot messaging service with more than 450 million users around the world stunned many Silicon Valley observers with its lofty price tag. But it underscores Facebook’s determination to win the market for messaging, an indispensable utility in a mobile era. 

Combining text messaging and social networking, messaging apps provide a quick way for smartphone users to trade everything from brief texts to flirtatious pictures to YouTube clips – bypassing the need to pay wireless carriers for messaging services. And it helps Facebook tap teens who will eschew the mainstream social networks and prefer WhatsApp and rivals such as Line and WeChat, which have exploded in size as mobile messaging takes off.  “People are calling them ‘Facebook Nevers,'” said Jeremy Liew, a partner at Lightspeed and an early investor in Snapchat. WhatsApp is adding about a million users per day, Facebook co-founder and chief executive officer Mark Zuckerberg said on his page on Wednesday. 

“WhatsApp will complement our existing chat and messaging services to provide new tools for our community,” he wrote on his Facebook page. “Since WhatsApp and (Facebook) Messenger serve such different and important users, we will continue investing in both.” Smartphone-based messaging apps are now sweeping across North America, Asia and Europe. “Communication is the one thing that you have to use daily, and it has a strong network effect,” said Jonathan Teo, an early investor in Snapchat, another red-hot messaging company that flirted year ago with a multibillion dollar acquisition offer from Facebook. 

“Facebook is more about content and has not yet fully figured out communication.” Even so, he balked at the price tag. As part of the deal, WhatsApp co-founder and chief executive officer Jan Koum will join Facebook’s board, and the social network will grant an additional $3 billion worth of restricted stock units to WhatsApp’s founders, including Koum. That is on top of the $16 billion in cash and stock that Facebook will pay. “Goodness gracious, it’s a good deal for WhatsApp,” Teo said. 

TERMS 

1. Shares in Facebook slid 5 percent to $64.70 after hours, from a close of $68.06 on the Nasdaq. 

2. Facebook said on Wednesday it will pay $4 billion in cash and about $12 billion in stock in its single largest acquisition, dwarfing the $1 billion it paid for photo-sharing app Instagram.

3. The price paid for Instagram, which with just 30 million users was already considered overvalued by many observers at the time. 

4. Facebook promised to keep the WhatsApp brand and service, and pledged a $1 billion cash break-up fee if the deal falls through. 

5. Facebook was advised by Allen & Co, while WhatsApp has enlisted Morgan Stanley for the deal.