Earlier this year, in a slightly surprising move, Facebook acquired popular messaging app, Whatsapp, for £13.6 billion ($22 billion). You'd think that a company paying out that much would at least have a plan to make that money back, right?
It turns out that Facebook CEO, Mark Zuckerberg has no immediate plans for the company's latest mobile acquisition according to Reuters. The CEO admitted at an event in India that he has “no near-term plans to make money from the service.”
Facebook was originally set to buy Whatsapp for $19 billion but due to the company's increased stock value, the final bill rose to $22 billion, or £13.6 billion here in the UK.
Whatsapp works across all phone platforms, across borders without advertising. The app only charges users £0.69 or $0.99 a year after they've used it for a single year. Additionally, if you happen to get a new phone number before the subscription renews, then you'll end up with another year free, meaning that Whatsapp isn't making a ton of money on its own.
Since Facebook has no plans for Whatsapp, it's still very unclear as to why the company felt the need to shell out so much money for it.
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KitGuru Says: Honestly, I don't think anyone understands why Facebook spent so much money on Whatsapp, especially considering that it only spent $2 billion on Oculus, which has much greater money making potential. What do you guys think Facebook should do with Whatsapp? Will the company ever recoup its $22 billion investment on the service?