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Facebook, Inc. (FB)

Discussion on Acquisition of WhatsApp Conference Call

February 19, 2014 6:00 PM ET


Deborah Crawford – Director, IR

Mark Zuckerberg – Founder, Chairman and CEO

Jan Koum – CEO, WhatsApp

David Ebersman – CFO


Eric Sheridan – UBS

Doug Anmuth – JP Morgan

Mark May – Citigroup

Justin Post – Bank of America/Merrill Lynch

Ross Sandler – Deutsche Bank

Kevin Potterton – RBC Capital Markets

Anthony DiClemente – Nomura Securities

Youssef Squali – Cantor Fitzgerald

Brian Wieser – Pivotal Research

Robert Peck – SunTrust



Thank you for joining us today to discuss Facebook’s acquisition of WhatsApp. Now I’d like to turn the call over to Deborah Crawford, Director of Investor Relations at Facebook.

Deborah Crawford

Thank you. Good afternoon, and welcome to the call. And thank you everybody for joining us on such short notice.

Joining me on the call today are Mark Zuckerberg, CEO of Facebook; Jan Koum, CEO of WhatsApp; and David Ebersman, CFO of Facebook.

Before we get started, I would like to take this opportunity to remind you that our remarks today will include forward-looking statements, and actual results may differ materially from those contemplated by these forward-looking statements. Factors that could cause these results to differ materially are set forth in today’s press release and our Annual Report on form 10-K filed with the SEC.

Any forward-looking statements that we make on this call are based on assumptions as of today and we undertake no obligation to update these statements as a result of new information or future events.

And now, I’d like to turn the call over to Mark.

Mark Zuckerberg

Thanks, Deborah, and thanks everyone for joining us today on such short notice.

I am excited to announce that this afternoon we entered into an agreement to acquire WhatsApp. The combination of WhatsApp and Facebook will allow us to deliver new and engaging mobile experiences, connect many more people around the world and achieve our mission of giving people the power to share, and making the world more open and connected.

Over the last couple of years, Facebook has been on a journey towards becoming a mobile company. Our goal is to connect everyone in the world. And to do this, we’ve invested in delivering great mobile experiences like Instagram, Messenger and of course our core Facebook apps on iOS and Android. We’ve made great progress here.

945 million people now use our mobile products every month, and 556 million of those people use them each day. As I said in our last earnings call, our goal for Facebook over the next few years is to deliver a set of new mobile products that allow people to share any type of content with any set of people they want.

We want to provide the best tools to share with different size, groups and in different context, and to develop more mobile experiences beyond just the main Facebook app, like Instagram and Messenger. This is where we see a lot of growth, as well as a great opportunity to better serve our whole community.

WhatsApp fits this vision perfectly, and the combination with Facebook, will help strengthen both services. WhatsApp is an extremely high quality product, with incredibly strong engagement and rapid growth. It doesn’t get as much attention in the U.S. as it deserves, because its community started off growing in Europe, India and Latin America. But WhatsApp is a very important and valuable worldwide communication network.

In fact, WhatsApp is the only widely used app we’ve ever seen that have more engagement in a higher percent of people using it daily than Facebook itself. After doubling in size from the last year, more than 450 million people now use WhatsApp monthly and more than one million new people are signing up every day.

Based on our experience of building global services with strong growth and engagement, we believe WhatsApp is on a path to reach over one billion people worldwide in the next few years. Internet services that reach a billion people are all incredibly valuable, and we believe WhatsApp will be as well.

Our focus will remain on connecting more people and increasing engagements, but over the long-term, we look forward to seeing what the team can do to build a really great business.

We expect them to bring the same quality and innovation they bring to the rest of the products, and the successful subscription model they already have in place is the product in start. As Facebook works to connect the entire world and to build the infrastructure for global community, WhatsApp will clearly help accelerate our progress.

Jan and the team have built the product with a simple, fast, reliable and a really great experience for people. It’s a great model for our own mobile development process.

WhatsApp also complements our services and will add a lot of new value to our community. People use WhatsApp as a replacement for SMS to communicate with their contacts as well as small groups of people. Our communication product like Facebook Messenger and Chat are used mostly for chatting with your Facebook friends and often sending messages that aren’t necessarily real-time.

These are both different and important use cases, and we’re going to invest in both, to serve both use cases better. We’re committed to building and operating WhatsApp independently. Their product roadmap is very exciting and it’s not going to change.

We will work hard together over the coming years to help WhatsApp grow even faster and reach many more people. As part of this, we expect that overtime WhatsApp will help us make progress in our mission to connect the entire world through things like internet.org by supporting our goal of delivering basic internet services to everyone in the world at affordable prices.

Read the rest of this transcript for free on seekingalpha.com