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Facebook's New Message to WhatsApp: Make Money (wsj.com)

Posted by msmash on from the your-time-has-come dept.

Deepa Seetharaman, writing for WSJ: Four years after Facebook bought WhatsApp for $22 billion, it is formally starting the messaging app on a new mission: bringing in revenue. WhatsApp on Wednesday detailed plans to sell advertisements and charge big companies that want to reach their customers through its service [Editor's note: the link may be paywalled: alternative source], launching its first major revenue streams as growth at Facebook's main app is starting to decelerate. The measures are aimed at connecting businesses with WhatsApp's user base of roughly 1.5 billion accounts, WhatsApp executives said.

The announcements follow disagreements between Facebook leaders and WhatsApp's co-founders, Jan Koum and Brian Acton, over how to monetize the popular, free service. Mr. Koum and Mr. Acton resisted efforts to put ads in WhatsApp, and over the past year both men have decided to leave Facebook and the messaging app they started in 2009 -- a breakup that was the subject of a Page One article in The Wall Street Journal in June. [...] Next year, WhatsApp plans to show ads in its Status feature, company officials told the Journal. Status allows users to post montages of text, photos and video that appear for 24 hours -- similar to an Instagram tool called Stories. About 450 million people use WhatsApp Status, compared with about 400 million who use Instagram Stories, which already shows ads.

75 comments

  1. A lesson they all should learn by Anonymous Coward · · Score: 0

    No one paid a dime to use AIM.

    1. Re:A lesson they all should learn by Anonymous Coward · · Score: 0

      The announcements follow disagreements between Facebook leaders and WhatsApp's co-founders, Jan Koum and Brian Acton, over how to monetize the popular, free service. Mr. Koum and Mr. Acton resisted efforts to put ads in WhatsApp, and over the past year both men have decided to leave Facebook and the messaging app they started in 2009

      And of course they gave back the billions that Facebook paid them, right? Right?

      Yeah, I didn't think so.

      More fake outrage.

    2. Re:A lesson they all should learn by Anonymous Coward · · Score: 0

      There's various other ways in which FB could make money on the service, it's probably not the ads so much as the fact that FB does all sorts of shitty things to serve the ads.

      Also, giving back the money is hardly an option. I doubt very much that there was a line in the contract allowing for backsies.

      The problem here is that FB was foolish enough to buy a service like WhatsApp without having a viable strategy for making money. The people using WhatsApp are doing so in part with the knowledge that there doesn't appear to be any snooping going on. Adding ads to the service would pretty much destroy that reason for using it, at which point there's numerous other possibilities, some of which already have traction.

    3. Re:A lesson they all should learn by Joce640k · · Score: 2

      The people using WhatsApp are doing so in part with the knowledge that there doesn't appear to be any snooping going on. Adding ads to the service would pretty much destroy that reason for using it

      Are you saying there can't be ads without snooping?

      --
      No sig today...
    4. Re:A lesson they all should learn by the_B0fh · · Score: 1

      Are you saying there can't be ads without snooping?

      HAHAHAHAHAHA.

    5. Re:A lesson they all should learn by DontBeAMoran · · Score: 1

      You don't need to spy on your users to show them ads. It will only be non-targeted ads.

      --
      #DeleteFacebook
    6. Re:A lesson they all should learn by johanw · · Score: 1

      They donated $50M of that money to competitor Signal.

    7. Re:A lesson they all should learn by Anonymous Coward · · Score: 0

      And people stopped using AIM because other platforms addapted its features and used ad revenue to make newer and better features.

      Newer and Better features being those that draw in actual ad clickers, not grumpy old dinosaurs who lamint their AIM friends for leaving the platform a decade ago.

    8. Re:A lesson they all should learn by Luthair · · Score: 1

      Also, giving back the money is hardly an option. I doubt very much that there was a line in the contract allowing for backsies.

      Its not about taking whatsapp back from FB, they claim to be morally outraged while sitting in the palaces that selling out bought. Give the money to charities, then they can complain.

      The problem here is that FB was foolish enough to buy a service like WhatsApp without having a viable strategy for making money. The people using WhatsApp are doing so in part with the knowledge that there doesn't appear to be any snooping going on. Adding ads to the service would pretty much destroy that reason for using it, at which point there's numerous other possibilities, some of which already have traction.

      Its the typical silicon valley process: 1) Get Users 2) ??? 3) Profit. I guess in Facebooks defense we all thought they were insane for buying Instagram for $1-billion.

    9. Re: A lesson they all should learn by Anonymous Coward · · Score: 0

      How about charging $50 for warrants to access account data. Cuts down on frivolous warrants, keeps the service free. Win/win.

    10. Re: A lesson they all should learn by Anonymous Coward · · Score: 0

      Still... How many times must we watch this same exact movie?

      Company buys hopelessly overpriced, profitless, popular asset. Company demands said asset become profitable. Users leave.

  2. sell fake news ad's and vote trump ad's by Joe_Dragon · · Score: 0

    sell fake news ad's and vote trump ad's

    1. Re:sell fake news ad's and vote trump ad's by Anonymous Coward · · Score: 0

      Sell fake news ads and vote trump aids. Wait... oh yeah, not a spelling mistake.

  3. Ill be deleting my account by Anonymous Coward · · Score: 0

    Morons

  4. Facebook Plan by Anonymous Coward · · Score: 0

    1. Buy WhatsApp
    2. ???
    3. Make money

    1. Re:Facebook Plan by umghhh · · Score: 1

      Yes they are clearly at stage 2.

    2. Re:Facebook Plan by Anonymous Coward · · Score: 0

      1. Buy WhatsApp
      2. ???
      3. Make money

      Yes they are clearly at stage 2.

      Mine cryptocurrency.

    3. Re:Facebook Plan by ausekilis · · Score: 1

      I'll counter with my plan:
      1. Create genius idea
      2. Get bought by facebook
      3. Swim in my money

  5. Business in the 2010s by thegarbz · · Score: 4, Insightful

    Step 1: Spend bazillions on a company that has not made profit.
    Step 2: Demand magic profit.
    Step 3: ???
    Step 4: Divestment, the idea of profiting to the tune of the value of these unicorns is utterly absurd.

    1. Re:Business in the 2010s by zlives · · Score: 1

      hehe spend bazillions because some magic fairy said you got it...now that fairy said, oops you don't.

  6. Yeah, that would be nice if it were true forever. by Anonymous Coward · · Score: 0

    To make a long story short, I like to screw (Troll) place on the web *cough*Reddit/r/politics*cough*

    I can build up thousands of karma by being the ultimate LGBTQ proponent; as one example.

    I'm a pretty left of center person; but a lefty according to MY family (Human caused global warming is real. Medicare for all. 1950s era income tax rates - inflation adjusted of course. I don't give a shit who you fuck as long as it isn't children.).

    But my fellow liberals - I guess I'll use that term - can be a bit loony toony. I mean, seriously, Jordan Peterson is their boogyman now?!

    Are they going to condemn Martin Luther King next for saying that "...all men are created equal ... " n his famous speech.

    Gimme a fucking break!

    That being said, there's too much thinking in the bubble these days. Listen to what feels good without skepticism and become hyper-analytical when what someone says doesn't fit your world view.

    I struggle with it everyday. I watch and read foreign news sources to try get out of my own bubble - they are a bit more neutral in regards to MOST of America (not Trump).

    If any of you here on Slashdot think you're above it, I got some horrible news for you!

    I want a rational World. Sometimes, rationality doesn't agree with my personal beliefs - I admit that to myself.

  7. They did have a revenue model. by Anonymous Coward · · Score: 1

    Before the FB acquisition, WhatsApp used to have a subscription model: $1/year and the first year was free.

    Cue the 'we can't all afford $1 a year' complaints.

    1. Re:They did have a revenue model. by DontBeAMoran · · Score: 1

      $1 per year? Are you insane, that's 8.333 cents per month!

      --
      #DeleteFacebook
    2. Re:They did have a revenue model. by Luckyo · · Score: 1

      People don't "complain about 1USD". They just quit the service.

      Guess what happens to IM service that has no people.

    3. Re:They did have a revenue model. by Anonymous Coward · · Score: 0

      The same as one that doesn't make money.

    4. Re:They did have a revenue model. by Luckyo · · Score: 1

      If you think that personal data of people using IM isn't worth money, I have a bridge on the moon to sell you.

    5. Re:They did have a revenue model. by youngone · · Score: 1

      Go on, I'm listening...

  8. They HAD a great way of making money by martyros · · Score: 4, Insightful

    When I first signed up for WhatsApp, they had a great way of making money -- 1 year free, subsequent years $1/year. I was so excited when I saw that -- FINALLY, a platform that will just let me pay to use it, rather than trying to spam me with junk and sell my information!

    When FB bought the company and cancelled the yearly fee, I knew it was only a matter of time. I'm mostly surprised it took them so long.

    --

    TCP: Why the Internet is full of SYN.

    1. Re:They HAD a great way of making money by ceoyoyo · · Score: 1, Troll

      When I first signed up for WhatsApp they had a great way of making money too. It was free. And the amount of money though brought in covered the costs of the weekend spent coding an instant messenger.

    2. Re:They HAD a great way of making money by torkus · · Score: 1

      If you think coding an app that's used by literally billions of clients is a weekend's work then you should probably dust off that C++ book from 20 years ago and remember what it's like to develop.

      Hell, even just assuming they used Signal's protocol unmodified and only had to build the UI it's still more than a weekend's work.

      Then let's not forget the server infra to support the ... trillions of messages and billions of pictures sent *daily*. If someone could build that in a weekend they'd be the Steve Jobs or Bill Gates of modern day devs, and paid accordingly.

      --
      You can get rich if you own a politician, but you have to be rich to buy one in the first place.
    3. Re:They HAD a great way of making money by torkus · · Score: 1

      Yes and no. $1/yr is actually annoying to process - any customer service around it quickly exceeds the revenue. Billing, CC processing, and similar fees take a large chunk of such small transactions as well. There's a lot of ill-will that 'free until you depend on it' generates and TBH I think their $1/yr fee was a placeholder pending acquisition.

      I do agree though, I wish I had the option to opt-out of ads for a $ fee on multiple platforms. Then you'd also get an idea of what the per-user revenue is for your 'free' service. I'm guessing it's a LOT more than people suspect.

      What Whatsapp *could* do is add/build a payment service (ugh, queue crypto dreams aka KIK coin) which means they owner of the payment system wouldn't incur processing fees and could easily get their $1/yr or whatever it might be. Adding functionality AND adding a means of income/payment.

      --
      You can get rich if you own a politician, but you have to be rich to buy one in the first place.
    4. Re:They HAD a great way of making money by ceoyoyo · · Score: 1

      Yeah, I might have been exaggerating a bit. The iPhone version of What's App was written by a Russian guy they hired from rentacoder.com. I don't know how long it took him to write it, but there are lots of tutorials that use making an XMPP IM app as an example. Add a bit of extra time to do the RAD GUI development (also lots of tutorials).

      The Blackberry port apparently took two months.

      You know Steve Jobs wasn't a programmer right?

  9. Time to look for a viable alternative by Anonymous Coward · · Score: 0

    Whatsapp is so ubiquitous that reaching out a critical mass on another platform will be difficult though. I am giving i a try on Telegram these days. Any better idea?

    1. Re:Time to look for a viable alternative by DontBeAMoran · · Score: 1

      Whatsapp is so ubiquitous that reaching out a critical mass on another platform will be difficult though.

      Is it really so ubiquitous? I never used it and all my friends are on either iPhone, iPad or Mac - except for one who's using Windows and I contact him via Google Talk (at least that's what iMessage calls it in the input window).

      If all your contacts are on Whatsapp, then yes you're boned. Just like I'm boned if I ever leave Apple.

      --
      #DeleteFacebook
    2. Re:Time to look for a viable alternative by johanw · · Score: 1

      Ypu're probably from the US, the only country where telco's introduced affordable unlimited sms plans in time to prevent WhatsApp and others from taking over the market. When WA came, sms costed here $0,10 per message and MMS $0,50. Now, SMS is cheaper but hardly used and MMS is phased out because noone uses it anymore. WA is abundant.

    3. Re:Time to look for a viable alternative by CohibaVancouver · · Score: 1

      Half my friends are on Android, half are on iOS. WhatsApp lets me chat with them easily across either platform, including group chats and (free) global voice conversations. SMS / MMS is a pain in that regard. Sending images and videos is also easy. My only complaint is they don't have a PC client - The fact that you can seamlessly move from PC to mobile is one of the things I really like about Facebook messenger.

    4. Re:Time to look for a viable alternative by ceoyoyo · · Score: 1

      I don't think so. Facebook gets a bit of lockin that way because it's a passive medium. You post something, your friends wander by to look at it. Same with instagram. No friends, less likes.

      WhatsApp is active. I send you a message. You send me a message. Neither of us is fishing for likes, so the size of our audience doesn't matter. It's a low bar for you to install Telegram if WhatsApp starts pushing ads.

      I think maybe that's something the marketers don't understand. "Social media" isn't special, it's just the same old old communication business where the characteristics of the medium are critical.

      You'd think they would have learned from all the IM systems that went before. We all thought ICQ had a lock, until everyone stopped using it.

    5. Re:Time to look for a viable alternative by DontBeAMoran · · Score: 1

      Canada, where I have no idea how cellphone plans work because I've never had one in my life. Way too expensive for the services offered. Communicating via iMessages, on the other hand, is free. I just need to find an open wifi network when I'm not home.

      --
      #DeleteFacebook
    6. Re:Time to look for a viable alternative by fred6666 · · Score: 1

      all my friends are on either iPhone, iPad or Mac - except for one who's using Windows and I contact him via Google Talk

      You must not have a lot of friends, given Apple has less than 15% market share in phones and even less in PCs.

    7. Re:Time to look for a viable alternative by fred6666 · · Score: 2

      Any better idea?

      Anything not based on a phone number as an identifier, which prevent most PCs/tablets without a cellular connection, from using.
      A phone number can also change, and is country specific. Also never use a protocol limited to one vendor.
      So really, there is no reason to use Whatsapp or iMessage.

    8. Re:Time to look for a viable alternative by Luckyo · · Score: 1

      Telegram and Viber. Two almost as ubiquitous IM clients that would easily replace whatsapp if it ever goes pay to use, or gets annoying with ads.

      And then, there's of course WeChat, which is functionally better than WhatsApp already in many ways but has other problems.

    9. Re:Time to look for a viable alternative by DontBeAMoran · · Score: 1

      All my friends are in Canada.

      --
      #DeleteFacebook
    10. Re:Time to look for a viable alternative by fred6666 · · Score: 1

      Even so, it would be surprising if Apple had more than, say, 80% market share there. Having only 1 friend within the remaining 20% pretty much means you must be living under a rock. Of course if Apple only has 30 or 15% of the market in Canada, it is even worse.

    11. Re:Time to look for a viable alternative by chispito · · Score: 2

      Half my friends are on Android, half are on iOS. WhatsApp lets me chat with them easily across either platform, including group chats and (free) global voice conversations. SMS / MMS is a pain in that regard. Sending images and videos is also easy. My only complaint is they don't have a PC client - The fact that you can seamlessly move from PC to mobile is one of the things I really like about Facebook messenger.

      There's a web client that proxies through your phone. web.whatsapp.com.

      --
      The Daddy casts sleep on the Baby. The Baby resists!
    12. Re: Time to look for a viable alternative by Anonymous Coward · · Score: 0

      People in wealthy areas generally use iPhones. There was a recent slash dot article about it.

      Personally I am pretty rich, and I only know a few people with Android.

    13. Re:Time to look for a viable alternative by DontBeAMoran · · Score: 1

      You still need a phone. Fail.

      --
      #DeleteFacebook
    14. Re:Time to look for a viable alternative by CohibaVancouver · · Score: 1

      There's a web client that proxies through your phone. web.whatsapp.com

      Thanks. Still not perfect, but a considerable improvement.

    15. Re:Time to look for a viable alternative by chispito · · Score: 1

      I know. Not my favorite solution, either. But if I'm at home on my computer, it's easier on the other party than my usual typo-ridden chats.

      --
      The Daddy casts sleep on the Baby. The Baby resists!
    16. Re:Time to look for a viable alternative by Anonymous Coward · · Score: 0

      Well everyone i know in Singapore, Malaysia and Indonesia has whatsapp. No exception. Usd50 phone has whatsapp.
      Line, wechat, gtalk(not popular), fb chat, bbm(amazingly still in Indonesia) are alternatives but whatsapp is king. All platforms, all income levels.

    17. Re: Time to look for a viable alternative by ArielOjosVerdes · · Score: 1

      There IS now a native Windows PC client. You can download it from Whatsapp's official site

  10. Get off Whatsapp by Anonymous Coward · · Score: 0

    I got off Whatsapp when facebook bought them. Facebook is pure evil and should just fade away.

    1. Re:Get off Whatsapp by DontBeAMoran · · Score: 1

      I have a similar story. I got a hotmail address way before Microsoft bought them but the day they did, I stopped using it and got myself a gmail address instead. ... at the time, Google was a lesser evil than Microsoft. Today, I'm not just sure which one is more evil than the other.

      --
      #DeleteFacebook
    2. Re:Get off Whatsapp by Anonymous Coward · · Score: 0

      I am an OG hotmail user, and still have two addresses that appear to be completely grandfathered, unlimited and immortal...your time line is off by almost a decade. Microsoft bought hotmail in 1997 and the first gmail trials were not until 2004. Did you go without email for seven years?

    3. Re:Get off Whatsapp by DontBeAMoran · · Score: 1

      I guess I was using something else in the meantime and forgot about it.

      --
      #DeleteFacebook
    4. Re: Get off Whatsapp by Anonymous Coward · · Score: 0

      For seven years...

  11. Comment removed by account_deleted · · Score: 1

    Comment removed based on user account deletion

  12. What's that? by Anonymous Coward · · Score: 0

    What's that? Whatever this is, they should rename it to "What's that?" because I've never heard of this shit.

  13. Re:And pivot! by Thunderpizza · · Score: 3, Insightful

    Not to sling mud on Telegram, but there was a story here saying the devs had to hand over their encryption keys: https://it.slashdot.org/story/... In the comments, a strong case for using Signal as a secure messenger can be found.

  14. Making money here is only "nice to have" by Comrade+Ogilvy · · Score: 1

    Buying WhatsApp was a defensive play by FB so that someone else could not easily muscle in on their social media turf and prick their frothy valuation.

    Similarly, Google arguably overpaid for YouTube and is ballpark only breaking even today. But the strategic value of having access to the search/usage data from the most popular video gateway is too big to let a competitor own.

    1. Re:Making money here is only "nice to have" by vakuona · · Score: 5, Insightful

      Google didn't overpay for Youtube. Google bought the largest video site on the planet. Google now controls two of the 3 largest websites on the planet (in the western hemisphere anyway). $1.65bn was money well spent to prevent a competitor either emerging, or another well funded competitor using Youtube to undermine their ad dominance. Youtube is now making quite a bit of money for Google. Money well spent.

    2. Re:Making money here is only "nice to have" by Hognoxious · · Score: 2

      The famous "We don't have a clue what to do with it, but someone else might - so bag it just in case" strategy? Also known as the dog in the manger.

      See also: Oracle, Java.

      --
      Confucius say, "Find worm in apple - bad. Find half a worm - worse."
    3. Re:Making money here is only "nice to have" by 110010001000 · · Score: 3, Insightful

      What do you think of Microsoft buying Github for $7.5B? Makes the Youtube purchase look like genius.

    4. Re:Making money here is only "nice to have" by thegarbz · · Score: 1

      But the strategic value of having access to the search/usage data from the most popular video gateway is too big to let a competitor own.

      So what you're saying is they didn't overpay?

    5. Re:Making money here is only "nice to have" by Comrade+Ogilvy · · Score: 1

      Yes, more or less. I am suggesting that Whatsapp profitability is not necessarily important to its purchase price.

      Google did not buy Youtube to increase net profits.
      FB did not buy Whatsapp to increase net profits.

      These are strong and profitable companies that could become even stronger from the acquisition, perhaps. But they were necessary acquisitions to deny potential competitors a foot in the door.

    6. Re:Making money here is only "nice to have" by vakuona · · Score: 1

      Exactly!

      Or Microsoft buying Skype. Or Nokia. Or Google buying Motorola.

      Yes, companies can and do make bad acquisitions, but Youtube is not one of them.

  15. Re:Yeah, that would be nice if it were true foreve by Anonymous Coward · · Score: 0

    Jordan Peterson is only a "boogyman" because he intentionally positioned himself in that role for the free PR.

    The guy likes to lean in to brushing up against borderline-problematic stuff, but only in carefully defensible language, and then starts tactically retreating from any position he could actually be held to if an interviewer starts pushing harder to clarify the mushy-kinda-dog-whistle-y thing he just said.

    It's very clearly crafted to sound alt-right-adjacent to further-left folks, but not have any real substance so his defenders can, well, defend him by lawyer-arguing how "well he technically never said X... Just W, Y, and Z that are adjacent to X, but not actually X."

    It's sort of how, on the opposite end of the spectrum, some of the anti-Gamergate ladies made a ton of money. They didn't really have anything to say that someone in academia hadn't already said in a much less grating manner, but they picked at groups they knew would react until... They got a reaction, which got their name out there, and got people to defend them, because the groups they picked at were assholes, and then it was a whole THING, and now people like that Logan Paul kid or whatever his name is is doing the same, being offensive in a calculated way to drive certain people towards him because of who he's offending and also free publicity.

  16. Let me know when to switch by Anonymous Coward · · Score: 0

    No problem! I'll just move onto the next best messaging service :) Just like msn messenger and Skype before it. Who else can agree how much these be corps have pretty much ruined all messaging services with their bloatware, massive UI's, incomplete voice and video services, file transfer, etc. Google hangouts is a disaster along with Skype

  17. So easy. by cesarbp · · Score: 1

    Create a WhatsApp Social Network where any message you post can be public.

  18. Re: Yeah, that would be nice if it were true forev by Anonymous Coward · · Score: 0

    From a Jordan Petersen apologia to an explanation about how women made huge YouTube money capitalizing on Gamergate. Your intellectual breadth is just astounding.

  19. I don't care for FB or Whatsapp by Anonymous Coward · · Score: 0

    Telegram.
    BWAHAHAHAHA!

  20. Signal, Telegram, or (best) Riot.im by Phil+Urich · · Score: 1

    Signal is a more secure, similarly phone#-based replacement. Telegram is an easier and more featureful one, and nicely has open-source clients and protocol albeit questionable server infrastructure and crypto. Riot.im on Matrix is philosophically the best (entirely Free Software, and decentralized and federated so it isn't beholden to one entity running a central server but everyone even running their own server can talk to everyone else).

    --
    I remember sigs. Oh, a simpler time!
    1. Re:Signal, Telegram, or (best) Riot.im by Anonymous Coward · · Score: 0

      XMPP has been around for almost two decades, a proven technology which has a robust support by a multitude of clients (many of which are Open Source) and due to its federated structure like e-mail does not tie you to a single provider. Since OMEMO the encryption is easy to use.

      Why people do not take care of the long-term consequences of their choices is beyond me.

  21. Ads in the status feature? by AbRASiON · · Score: 1

    The instragram like story thing?

    LOL Go for it, ruin it, I couldn't care less. I don't know a single person who uses that!

  22. I was happy it only cost $1 a year by Anonymous Coward · · Score: 0

    I mean it's hard to turn down $22 billion. but damn it'll never be profitable.

  23. Comment removed by account_deleted · · Score: 1

    Comment removed based on user account deletion