Facebook agrees to buy WhatsApp for $16 billion

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After being spurned by Snapchat, Facebook's Zuckerberg pays up to get into the fast-growing mobile messaging market

SAN FRANCISCO - Facebook said on Wednesday that it agreed to buy WhatsApp for at least $16 billion to expand into the fast-growing mobile messaging market.

Facebook is paying $4 billion in cash and $12 billion in stock for WhatsApp, a service that has 450 million monthly users and is adding more than 1 million new users a day.

'WhatsApp is on a path to connect 1 billion people. The services that reach that milestone are all incredibly valuable,' Facebook CEO Mark Zuckerberg said in a statement announcing the deal.

Zuckerberg has been trying to get into the mobile messaging market for a while. The company offered to buy Snapchat for $3 billion last year, but that messaging start-up spurned the offer.

To close the WhatsApp deal, Facebook offered an extra $3 billion in restricted stock units, a common type of equity compensation, to WhatsApp founders and employees. These awards will vest over four years. Jan Koum, WhatsApp's co-founder and CEO, also gets a seat on Facebook's board of directors.

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