Facebook to buy messaging startup in $16B deal

The frenzy to acquire fast-growing technology startups reached new heights on Wednesday as Facebook announced its largest acquisition ever, saying it would pay at least $16 billion for WhatsApp, a text messaging application with 450 million users around the world who pay little or no money for it.

The New York Times reports the the deal comprises $4 billion in cash and $12 billion worth of shares. However, the ultimate cost of the deal could rise to $19 billion, with WhatsApp employees and founders receiving an additional $3 billion in restricted stock units, which could vest during the next four years.

By any measure, Facebook is paying a steep price for a service that is widely used internationally but is less known in the United States. WhatsApp does not sell advertising and has very little revenue. It charges users a flat fee of $1 a year to use the service, and the first year is free, according to the Times.

Read more from the New York Times.