Facebook reinforces mobile strategy with $19 billion WhatsApp acquisition

In a surprise move, Facebook (NASDAQ: FB) has bought WhatsApps in a deal worth $19 billion.

Breaking this out, Facebook will pay $4 billion in cash and $12 billion-worth of shares for the company.

It will also grant shares worth $3 billion to WhatsApp staff, while WhatsApp's CEO Jan Koum will join the Facebook board.

Defensive move

The move comes as mobile users prove increasingly vital for Facebook's longterm success, both in terms of activity as well as revenue.

It's reckoned that Facebook now has 17 percent market share of global mobile advertising spend, while for game promotion and user acquisition the figure is higher, around 35 percent.

However, with Asian social mobile networks such as Kakao (Korea), LINE (Japan) and WeChat (China) aggressively expanding into Europe and North America, it seems Facebook is very keen to ensure it has its own from-the-ground up social mobile audience.

Opposites attract

With over 400 million monthly active users, particularly among the teenage and twentysomething age group, WhatsApp should be a complimentary acquisition for Facebook; hence the valuation, which is around half of Twitter's market capitalisation.

Certainly, mobile companies will look on with interest to see if Facebook decides to open up WhatsApp as a social gaming platform; something which transformed the mobile game markets in Japan and Korea during 2013, and is currently shaking out the Chinese market.