Why Facebook invested $19 billion in WhatsApp

Social networking giant Facebook has reportedly acquired messaging application WhatsApp for a deal priced at a whopping 19 billion dollars.

The billion-dollar acquisition deal includes 183,865,778 shares of Facebook stock, worth 12 billion dollars and 4 billion dollars in cash along with 45,966,444 restricted stock units (RSUs) to WhatsApp founders and employees, amounting to an additional 3 billion dollars in value to the deal.

The billion-dollar deal is eye popping not just for the price tag involved but for the reach into Europe and emerging markets that Facebook aspires to have, Tech Crunch reports.

According to the report, WhatsApp with its 450 million monthly users is far ahead in the international mobile messaging race for Facebook to catch up and for that, the social networking giant either needed to be the number one social networking abroad or acquire WhatsApp.

Facebook's own Messenger service had been launched late in 2011, while WhatsApp launched in 2009 and immediately took off in emerging markets where Messenger couldn't.

The report said that WhatsApp was much more popular than Facebook in several large developing markets, as per a survey conducted by Jana Mobile. In India, Brazil, and Mexico, respondents were 12 to 64 times more likely to say WhatsApp was their most used messaging app, compared to Facebook.

WhatsApp would give Facebook an important asset as it seeks to conquer the rest of world and maintain high engagement rates, the report added.