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Facebook Businesses Social Networks The Almighty Buck

Facebook's New Message to WhatsApp: Make Money (wsj.com) 75

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.

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Facebook's New Message to WhatsApp: Make Money

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

  • by thegarbz ( 1787294 ) on Wednesday August 01, 2018 @12:11PM (#57049978)

    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.

    • by zlives ( 2009072 )

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

  • by Anonymous Coward

    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.

  • by martyros ( 588782 ) on Wednesday August 01, 2018 @12:24PM (#57050060)

    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.

    • Re: (Score:2, Troll)

      by ceoyoyo ( 59147 )

      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.

      • by torkus ( 1133985 )

        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 Job

        • by ceoyoyo ( 59147 )

          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?

    • by torkus ( 1133985 )

      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

  • Comment removed based on user account deletion
  • 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.

    • by vakuona ( 788200 ) on Wednesday August 01, 2018 @01:48PM (#57050698)

      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.

      • Re: (Score:3, Insightful)

        What do you think of Microsoft buying Github for $7.5B? Makes the Youtube purchase look like genius.
        • by vakuona ( 788200 )

          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.

    • 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.

    • 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?

      • 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.

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

It is contrary to reasoning to say that there is a vacuum or space in which there is absolutely nothing. -- Descartes

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