WhatsApp Inc., was founded in 2009 by Brian Acton and Jan Koum, both former employees of Yahoo!.
At one point they applied for a job at Facebook but were rejected.
By December 2013 WhatsApp claimed that 400 million active users where using there service. As of 22 April 2014, WhatsApp had over 500 million monthly active users, 700 million photos and 100 million videos are shared each day, and the messaging system handles more than 10 billion messages each day. On August 24, 2014, Koum announced on his Twitter account that WhatsApp had over 600 million active users worldwide. WhatsApp added about 25 million new users every month or 833,000 active users per day.
Acquisition by Facebook
On February 19, 2014, months after a venture capital financing round at a $1.5 billion valuation, Facebook announced it was acquiring WhatsApp for US$ $22 billion (19 billion – This is an increase on the $19 billion (£11.8 billion) initially announced), its largest acquisition to date.
Facebook, which was advised by Allen & Co, paid $4 billion in cash, $12 billion in Facebook shares, and an additional $3 billion in restricted stock units granted to WhatsApp’s founders (advised by Morgan Stanley), Koum and Acton. Employee stock was scheduled to vest over four years subsequent to closing. The transaction was the largest purchase of a company backed by venture capitalists to date.
Days after the announcement, WhatsApp users experienced a loss of service, leading to anger across social media.
The acquisition caused a considerable number of users to move, or try out other message services as well. Telegram claimed to have seen 8 million additional downloads of its app. Line claimed to have seen 2 million new users for its service.
On May 9, 2014, the government of Iran announced that it had proposed to block the access to WhatsApp service to Iranian residents. “The reason for this is the assumption of WhatsApp by the Facebook founder Mark Zuckerberg, who is an American Zionist,” said Abdolsamad Khorramabadi, head of the country’s Committee on Internet Crimes. Subsequently Iranian president Hassan Rouhani issued an order to the Ministry of ICT to stop filtering WhatsApp.
Facebook’s WhatsApp acquisition challenged by privacy groups
The social network has come under pressure to declare what it plans to do with the messenger service’s personal data.
Non-profit organisations the Electronic Privacy Information Centre and the Centre for Digital Democracy have filed a complaint with the US Federal Trade Commission (FTC), urging the watchdog to investigate the agreement.
“Facebook routinely makes use of user information for advertising purposes, and has made clear that it intends to incorporate the data of WhatsApp users into the user profiling business model,” reads the complaint.
“The proposed acquisition will therefore violate WhatsApp users’ understanding of their exposure to online advertising and constitutes an unfair and deceptive trade practice, subject to investigation by the Federal Trade Commission.”