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Facebook's Zuckerberg reveals he approached WhatsApp CEO just 11 days ago

Facebook's Zuckerberg reveals he approached WhatsApp CEO just 11 days ago

By Agence France-Presse | Updated: 20 February 2014 11:25 IST

With a big, bold deal for hot messaging service WhatsApp, Facebook is demonstrating it wants youth, a wider footprint in more markets and new kinds of services to stay fresh.

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.

"Services with a billion people using them are all incredibly valuable," Zuckerberg said while discussing the purchase price during a conference call with analysts.

The deal came from a chat Zuckerberg had with WhatsApp co-founder and CEO Jan Koum, whom he described as a "valuable thought partner" and friend of many years.

"Last Sunday evening, about 11 days ago, I proposed if we joined together that would help us really connect the rest of the world," Zuckerberg said.

"He thought about it over the course of the week, came back and said he was interested."

(Also see: Facebook to buy WhatsApp in a $19 billion deal)

Zuckerberg and Koum, who both took part in the conference call, did not discuss details about WhatsApp revenue, saying the focus for the foreseeable future would be on growth, not making money.

WhatsApp software is available free, but after a year, users are asked to pay annual subscriptions of 99 cents each.

Roger Kay at Endpoint Technologies said WhatsApp has become one of the most popular mobile applications worldwide "because it allows you to message anybody anywhere for free."

Kay said the deal makes sense on one level because of Facebook's record stock run-up.

"When you have a stock like that which has run up quickly and created a lot of paper value, it's good to trade that for other value," he told AFP.

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