Tech Acquisitions 2014: Facebook’s $19 Billion Purchase Of WhatsApp Dwarfs Earlier $1B Instagram Buy; App Price Equals Market Cap Of Gap, 10% More Than Sony’s

Tech acquisitions 2014: Facebook’s recent purchase of global messaging platform WhatsApp has stunned numerous tech watchers and analysts, particularly with the huge $19 billion price the social network giant paid. The move is one of the biggest tech acquisitions since HP bought Compaq for $25 billion in 2001.

According to TechCrunch, WhatsApp, which raised $8 million during its 2011 launch is now worth almost $20 billion. In a comparison, the value of the app with 450 million users dwarfs the $1 billion price tag Facebook paid for Instagram and makes it equal to the market cap of The GAP and ten percent more than tech giant Sony.

In a comparison by TechCrunch, it also noted that the $19 billion price tag is equal to one-third of the market cap of auto giant Ford, almost three times of Groupon, 62% of Twitter’s, 60% of Sprint, and one-third of HP. The price Facebook paid for WhatsApp can also buy 2 nuclear submarines, 76,000 trips to space on Virgin Galactic and 19 more Instagrams.

The comparison is based on market capitalization of companies sourced from Google Finance. In a report by Forbes, WhatsApp creators Jan Koum and Brian Acton are now billionaires based on the stake they hold on the recently acquired company.

Tech analyst Michael Wolf in an article on CNN.com says that the acquisition is worth the money. WhatsApp’s 450 million active users is what has made it attractive in terms of growth.

Comparing it with previous acquisitions using a price-per-user model, Facebook paid $42 for each WhatsApp user. Yahoo’s purchase of Tumblr paid $33 per user, while Google’s acquisition of YouTube in 2006 paid $48 per user.

The tech analysts says that WhatsApp is such an attractive prize for Facebook for its almost half-a-billion user base. It’s not only massive to start with, but it’s also growing quickly at a rate of one million per day.