I kind of have to wonder what Jan Koum and Brian Acton were thinking (OK, I don't really wonder - they got paid billions of dollars, who wouldn't do it).
But, of course, if you sell a company for billions of dollars, there is the obvious expectation that within some time frame your company will earn revenue and profit to support that valuation. You can't complain "they're adding ads!" unless you have a credible solution for somehow bringing in billions of dollars otherwise, and the WhatsApp founders didn't.
> You can't complain "they're adding ads!" unless you have a credible solution for somehow bringing in billions of dollars otherwise, and the WhatsApp founders didn't
What about business features? Pretty much every business in my country advertises a Whatsapp number, from large companies to mom-and-pops. People contact them over Whatsapp to ask questions, make complaints, order stuff, everything. I can't believe Facebook is unable to monetize that.
It seems to me that Facebook is severely biased towards ads because they already have a platform and it's a market they obviously know well. That doesn't mean ads are the only way to make money.
I liked the business app especially for shortcuts, auto-replies and other stuffs. But yes, official APIs is deal-breaker.
NOTE: Many applications and websites somehow are already using custom APIs (or something). Ex. Airlines sending booking details as WhatsApp message, flight/bus status and so on.
I work for one of the largest travel groups, I'm actually working on flight notifications, and they don't want to go there - no idea how other airlines or travel groups do it.
Ha think about all of the surface area on Facebook employees faces/arms that you could tattoo advertising on. I wonder if they have considered the financial opportunity cost there?
> None of the proposals were as lucrative as Facebook’s ad-based model. “Well, that doesn’t scale,” Ms. Sandberg told the WhatsApp executives of their proposals, according to a person familiar with the matter.
I think it's partly a self-selection problem, where the companies which use the service don't have enough revenue to contact their customers through dedicated channels. If you try to monetize this, then most companies just leave because those who could pay already have such channels to customers.
It's the same problem with offering users to pay for an ad and tracking free facebook. Those users who would pay for facebook are exactly the ones you want to show ads to, whereas the others are uninteresting revenue wise either way.
> the companies which use the service don't have enough revenue to contact their customers through dedicated channels. If you try to monetize this, then most companies just leave because those who could pay already have such channels to customers
I'm not sure that's true about the companies which use Whatsapp. They are not using Whatsapp because they can't afford anything else. They're using it because the clients use it. In a large part of the world, everyone uses Whatsapp for everything. Companies go out of their way to support clients via Whatsapp - they even pay for shady unofficial APIs implemented by third parties.
A company unable to afford "Whatsapp Business" probably doesn't need it anyway. They can just continue using regular Whatsapp. No need to force them to use the paid version.
Some of the use cases for Whatsapp Business:
- Customer service.
- Product listings.
- Orders and delivery.
- Knowledge base.
- Notifications (flight status, tickets, etc).
- Promotions.
A lot of these would be attractive for large companies.
That doesn't scale nearly to the $20 billion they were bought at. Yelp, which has a similar business model to what you quoted, and is more essential to businesses than WhatsApp, only has a market cap of $3.6 billion.
I'm not sure you understand how popular Whatsapp is outside the US. No one in my country has heard of Yelp (201 million population). Everyone uses Whatsapp daily. Whatsapp has 1.5 billion active users.
Yeah, but if we're going by a business features monetization model, what would matter is the number of businesses that are signed up, not the number of users.
>>>Mr. Acton initiated the clause in his contract allowing for early vesting of his shares. But Facebook’s legal team threatened a fight, so Mr. Acton, already worth more than $3 billion, left it alone, according to people familiar with the matter.
hmm, i think no. once you sell th company you only have to fulfill your acquisition agreement. in some cases that may be revenue targets but not always. do we know exactly what they needed to do to keep their jobs post acquire? i don’t think it’s obvious
The ultimate goal of software companies is to control as much "platform space" as possible. This is mainly due to the way we treat virtual properties legally, and it only becomes truer as e.g. APIs are ruled copyrightable.
It's not implausible to believe that a big tech co would be interested in acquiring a platform defensively and/or for control over the platform ecosystem.
When they sold their business it was not their responsibility to make sure the buyer was getting a good deal. It was the responsibility of the buyer to honor the agreements they made as part of the purchase.
People think they generate no revenue via ads, but you do, all of you are.
Best ads on Facebook are brand ads and these work on your subconscious. Unlike Google Search that shows immediate intent, you don’t have an immediate need while browsing FB. Sure there’s the occasional impulse buy for some iPhone case or jewelry you don’t need, but the big companies don’t care for your clicks. E.g. what are the default beverages people buy when organizing an event? Beer and Coke and it’s not a coincidence or because there aren’t better choices.
In other words, as long as you look at ads, your buying choices get influenced by them, so you are generating revenue for pay-per-view ads, even if you never clicked on one.
I don’t mind seeing ads though, as long as they are tasteful. What I mind is the tracking and in that regard Facebook is among the worst.
But, of course, if you sell a company for billions of dollars, there is the obvious expectation that within some time frame your company will earn revenue and profit to support that valuation. You can't complain "they're adding ads!" unless you have a credible solution for somehow bringing in billions of dollars otherwise, and the WhatsApp founders didn't.