Social network giant Facebook has bought instant messaging service WhatsApp for a wallet-busting $16 billion (£9.6bn). The hugely popular phone app allows users to send messages using internet connections, avoiding SMS charges. WhatsApp has 450m monthly users - 70 per cent who use the app daily - and claims to register 1m new users every day.
It is free to use for the first 12 months, after which it costs $1 per year but will still save the user money on texting charges. The deal is made up of $4bn (£2.4bn) in cash and $12bn (£7.2bn) of Facebook shares. Mark Zuckerberg, founder and chief executive of Facebook, said: "WhatsApp is on a path to connect one billion people.
"The services that reach that milestone are all incredibly valuable." The WhatsApp brand will continue and its headquarters will remain in Mountain View, California. Facebook recently reported record revenues of $2.5bn (£1.5 billion) from 757 million daily users. In 2012, Facebook bought photo sharing social media site Instagram for $1b billion (£600m).