What does WhatsApp’s upcoming monetisation mean for the company and its users?
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Living in a country where WhatsApp is ubiquitous, I really don't understand that. Is it just a lack of imagination on Facebook's part? Companies, from tiny ones all the way up to enterprises, will pay serious money to be able support customers over WhatsApp in an effective way. And then I've not even begun to consider the marketing channel WhatsApp could be (also without turning into a spam hotbed).
Facebook is the gatekeeper to WhatsApp, effectively a monopoly to a piece of core telecom infrastructure for a lot of countries. They could squeeze this out to the max. Right now, they give all of this away for nearly free and share the profit with the likes of MessageBird and Twilio. TBH i'd prefer they tax businesses than my eyeballs.
Verbatim: it wouldn't scale.
Acton said he tried to push Facebook towards an alternative, less privacy hostile business model for WhatsApp — suggesting a metered-user model such as by charging a tenth of a penny after a certain large number of free messages were used up.
But that “very simple business” idea was rejected outright by Facebook COO Sheryl Sandberg, who he said told him “it won’t scale”.
“I called her out one time,” Acton also told Forbes. “I was like, ‘No, you don’t mean that it won’t scale. You mean it won’t make as much money as…,’ and she kind of hemmed and hawed a little.
It looks like to me that the multi-billion dollar company that Facebook is, with all the very intelligent people working there, is a one pony trick that only knows how to make money by putting ads everywhere.
That’s more an engineering problem than a sales one.
It's just that ads is significantly more profitable than having to run sales teams in the 200 odd countries around the world. Especially since ads is largely self service even down to ML models monitoring abuse.
Sales teams all over the world is expensive, self service ads supported by a small team are a lot cheaper.
E.g. A certain telecom api provider doesn't need sales teams all over the world. In fact I've never seen any ads or anything about them locally, but guess who's on top of my mind when I need to send or receive sms in some other country?
Advertising is charging for the fantasy of more business. Oddly enough, the production facilities for fantasy scale with the customer count. ;)
Facebook already having an ad business can also be used as a counter-argument: cannibalization. Some of the ad-spending going to WhatsApp would definitely be spent on Facebook instead if WhatsApp remained ad-free. But I can't imagine that they are not fully aware of this (even Hanlon's razer must have limits somewhere), so what remains is that they consider the expansion of addressable ad audience more valuable than other monetization strategies plus the massive hit the WhatsApp brand will take from ad introduction. And because those ads would be almost worthless without the targeting ad customers expect from the Facebook brand, the whole thing is like an indirect confession about the existence and quality of shadow profiles describing those who are not registered with the mothership. Well, that group is about to shrink...
When companies reach that stage, the rational thing to do is .. go public, so you’d also get the benefits (share liquidity and ability to raise money publicly)
If Google was above this magic size before it became an LLC, why didn't the LLC also count? I'm not saying you're wrong, but something didn't add up
Alphabet was created later, together with splitting Wayne and a few others.
I don’t remember all the different triggers, and each triggers a different reporting requirement - more than 500 shareholders, more than $X billion paid to suppliers, stuff like that. Google, and later Facebook met all of them.
The reason the business rationale for WhatsApp (and lots of other digital services) is so wired is because the normal dynamics is supply and demand don't apply.
In a "normal" market, the cost of providing a service and revenue tend to be similar... because companies compete on price.
The revenue potential of WhatsApp is completely unrelated to the cost of inventing or running WhatsApp. The revenue potential has nothing to do with the value to customers. Weird inputs, weird outputs.
It felt a serious transgression of my privacy. Though in hindsight I realised it was an easy task, I can, after all, see if people are using Whatsapp if I have their number so there is little to stop companies doing the same lookup if they have my number.
But it felt very uncomfortable.
I don't want companies involved with my Whatsapp, it is exclusively for messaging my missus, and group chats with friends and family. Nothing else.
I did read somewhere that one of the founders said the aim was to integrate apps/companies into Whatsapp, but for me "No!".
I am dreading what the ad monetisation will be like. Since everyone I am friends with, related to or worked with use Whatsapp, their market penetration is ubiquitous here in my London ecosphere. Hope they don't ruin that.
Everyone on WeChat claims it's amazing, I hated it.
Direct marketing rules should still apply, in the UK you can't legally cold-call mobile numbers.
I mean, I get it I agree with you and use whatsapp the same way. The one time I tried to use it to message for a takeaway they just ignored the order.
But it caught me off guard as I was not expecting it. And did not welcome it.
I wonder what the stats are for their members' responses. Maybe was just an A-B test.
The container Netflix is inside doesn't know anything about me other than my Netflix account. Presumably they've decided that annoying paying customers is a good idea.
So was I and I immediately finished my relation with WhatsApp.
There’s no one there I can’t get on Facebook, Instagram or signal.
I'm actually waiting for FB/Whatsapp to announce it's specific monetization strategy so that it becomes the trigger to tell my friends/family on WhatsApp off of it and onto Signal. Otherwise, you're correct, it's very difficult to convince people otherwise.
https://signal.org/android/apk/
(scroll down past the warning urging you not to use this method)
When Facebook opened themselves up to everyone instead of College students, I felt the same way. When FB opened up to companies, I cancelled my account.
In the end it didn't matter. Companies were creating FB accounts anyway. Curbing them to a more explicit form of corporateship was the right thing to do than let them masquerade as users.
Internationally, WhatsApp is a very large force in both friendly communications and corporate/public/commercial avenues to communicate. Creating a WhatsApp business account (payable) to communicate with customers is the right thing to do. And I would not mind it as long as it is behind a portal and filter.
I don't want, I don't care and while I don't find it "terrifying" I DO think it's an annoyance not asked for
If I want to see what's new there I go there. Period.
This was from the Forbes interview with whatsapp founder Brian Acton ( https://www.forbes.com/sites/parmyolson/2018/09/26/exclusive... )
"An SMS has just come in from his local Honda dealer saying “payment received.” He points to it on his phone.
“This is what I wanted people to do with WhatsApp,” he says of the world’s biggest messaging service, which is used by more than 1.5 billion people and provides ad-free, encrypted messaging as a core feature. “This was informational, and useful.""
"
"Acton had proposed monetizing WhatsApp through a metered-user model, charging, say, a tenth of a penny after a certain large number of free messages were used up. “You build it once, it runs everywhere in every country,” Acton says. “You don’t need a sophisticated sales force. It’s a very simple business.”
Acton’s plan was shot down by Sandberg. “Her words were ‘It won’t scale.’ ”"
Edit: someone else also mentioned this in https://news.ycombinator.com/item?id=18431281
Forgive my skepticism, but this sounds fake to me. Unless there are countries where you local auto dealer finances your car. Everywhere I've lived, financing goes through a bank or the manufacturer's bank/bank partner (GMAC, etc...).
E: Actually, I guess he’s just paying for his minivan repair.
Ah, that makes more sense.
I'd largely glossed over Facebook's acquisition of WhatsApp back in '14 as just another big tech company eating up a smaller 'potential future competitor,' but in hindsight it looks like it was the beginning of the end of WhatsApp as a simple, reliable and ad-free private messenger.
Super glad I quit the platform in 2017 -- never been more tranquil.
RCS can't come fast enough. https://www.digitaltrends.com/mobile/what-is-rcs-messaging/
And their Wechat helped created the biggest misinformation system, the so called self-media.
For physical mail it makes sense that the cost is mostly for actually handling actual pieces of mail. But for telecoms the main cost is fixed - so it makes more sense to pay for the network and then actually using it is free, or at worst, using it only costs extra if you're such a big user that you increase those fixed costs.
I pay £7 per month for this phone service. I believe the number of calls is theoretically limited (I've never hit the limit) but the number of text messages isn't.
So you pay for phone calls? I don't think the message you are replying to is suggesting a cost per message. Just that it is usual for their to be a cost associated with the service (unlike WhatsApp at the moment).
But I underscore that the service is what's important here and that's what I'm willing to pay for, not the calls. Imagine you find that your phone company, without you noticing, actually dropped 20% of your incoming calls. You didn't pay for those calls so who cares right? No, you pay for service, delivering other people's calls to you reliably is part of that service.
I pay for YouTube Red or whatever it's called now, same rationale. I pay, I get the service. YouTube doesn't make videos about Minecraft, TLS, US law, or whatever, but the platform I watch them on needs paying for somehow and I'm damn sure I don't want to watch adverts.
Current state of messaging across the world is super messy and sucks, but believing that telecoms are the answer is just naive.
While sms allows you to communicate cross providers, the amount of money they charge, both historically and even nowadays for that is just insane. Att still charges $0.25 for international text messages, in 2018. Due to fragmentation of the market, the only way for them to stay in the game is to have something that’s shared, but boy, they do plan to make a lot money out of it.
Let's see how they deploy ads. But it would be a shame that WhatsApp shut downs because Facebook cannot monetize the application. If anything, I'm glad they're going this route instead of charging a fee to use the app.
And I do not trust Facebook Inc. to put privacy over profits [0] given it's trashy record in this space.
End-to-end encryption is a valid point, but WhatsApp was not the first to pioneer it. Scale-wise it just got lucky, and Facebook just threw in a bunch of dollars from its coffers to acquire all that.
[0] https://techcrunch.com/2018/09/26/whatsapp-founder-brian-act...
Well, they do collect and use metadata, e.g. chat history: https://www.forbes.com/sites/thomasbrewster/2017/01/22/whats...
There's better options regarding privacy, e.g. Signal, which does not collect metadata.
Source: https://www.aclu.org/blog/national-security/secrecy/new-docu...
In WhatsApp, the server delivers your encrypted message to each member of the group. It's an optimization called "server-side fan-out". Check the whitepaper for more deatils: https://www.whatsapp.com/security/WhatsApp-Security-Whitepap...
Interestingly this is also what the Signal libraries implement. So applications making use of them will generally make use of this optimization.
For some reason, the Signal application itself was not making use of this optimization. My guess is that it had not updated its code yet when I looked. This might have changed since then.
BUT, and that's a big but, as a passive observer (and if Signal kept logs of things) you can still figure out group chat membership by looking at who sent the same kind of message (same length) to who, and at what time. Basic relationship graph stuff.
Didn't you see recently on HN they announced they now have a mechanism so that their servers aren't even aware of who sent a message? The recipient can tell who it's from but the server just sees like a stamp on the outside "This is one of the messages Bob agreed to receive from people" and it says to itself "OK, Bob said he wants these, don't care who it's from".
AIUI The system can count usages of Bob's tokens and rate-limit those. If Bob's Ex Gina is sending him fifty "Fuck you, Bob" messages per day, that might mean Bob's friend Harry has to admit his identity to the server to cut through the noise. Eventually Bob blocks Gina and she's no longer able to use his token and annoy his friends. Blocking someone invalidates your old tokens.
I understand why you hold this view but woe I wish it to be that more people agreed with me and held the opposite. I wish we were fine with paying money instead of "being monetized" and having ads shoved in front of us.
I don't want to see how they deploy the ads; I don't want ads, period. By their very nature, ads are a guarantee that I'm going to be tracked, sliced, analyzed, deanonymized, and attention-grabbed any time I crack open that app. I guess I'm turning more and more into the Luddite but I am tired of the ads, tired of the continual chase for my ever-decreasing number of seconds on this planet.
I don't even know that letting me pay to not have ads is a) practical (because what's to say the ads aren't being shown in a "hidden" way such that I am still tracked and followed) or b) fair (because what about the other billions of people on the planet for whom money can't be traded for time as they have more of the latter than the former yet still don't deserve to be tracked). But I still don't like ads.
I think WA is the most widespread but I wouldn't call it the simplest or most reliable. They are all pretty similar imo
The regular "Telegram" has secret chat. It is tied to device, but you can do desktop -> phone or desktop -> desktop or phone -> desktop specifically, but that depends on a bit of coordination.. but yeah definitely not synced between each combination
And the flipside is that people will look at your app and say "what have you done for me lately? What features have you added?"
Which was the reason they could scale to their current userbase with some 50 people.
Why is this an either/or situation? Why not give users the option to pay if they so choose?
Consider that large portions of the world (among them Germany with its extremely old population) use WhatsApp pretty much exclusively; they don't seem to have a problem using it.
Whereas something like iMessage would be a complete nonstarter with its semi-iOS exclusivity.
No, wait, most people on this forum could knock up a messaging app in a couple of days and run it on aws lambda for less than pennies per user per year.
https://aws.amazon.com/lambda/pricing/
I'm being snarky but I really don't get your point, nothing about this is expensive or difficult. Signal case in point:
Times 1.5 billion users is at least $30m / year, where to get that?
If you see an ad on Facebook messenger or WhatsApp, don’t hide it, instead Report It.
Report it as sexual content, report it as a scam, report it for whatever reason.
Guidelines, try to use different reasons and try to make it a realistic reason.
Facebook likes to gather our data for their ML, so let’s weaponize it. If we feed their platform garbage data, the ML will block the ads automatically, driving advertisers away or making report handling prohibitively expensive.
We likely only need 0.01% of users to feed garbage data to trigger their ML decisions. They’ll eventually be forced to find a better alternative.
More friends have joined Signal the week I told them I was living by the deadline than in the previous years, where I was mostly ignored.
Otherwise, the OP is wasting time and bandwidth sending a "this demographic loves our ads, let's buy more of them" message to the brand, and a "these individuals like to click on ads so we can probably stick a few more in their message stream" message to Facebook...
All you're doing is following the same blackhat strategy that has been tried and prevented years ago. You know the one where you keep flagging your competitor's ads as abusive in the hope of getting them taken down. It's basically the same as click fraud.
In your case it's even more stupid since I assume you're doing so with a logged in account and without using proxy services so your IP will be static.
I guarantee that your reports has changed nothing other than make it more likely that your account is going to banned for abusing their terms of service.
Honestly, I assumed the same. That I would be put on a shadow-ban list for reporting. However, the lifecycle looked something more like:
1. Reports went through without getting any response from FB. Definitely influencing their ML models.
2. A few months later, I started getting emails from FB acknowledging the report was investigated. I imagine that means manual effort.
3. Its been atleast 2 weeks since I've seen a ad in the FB Messenger iOS app.
And after the pivot to messaging they added embedded media, voice calling and now video calling.
A way to charge the spammers?
I only recently discovered WhatsApp spam when a spammer joined by a group invite link. The link had never been published publicly, and yet a spammer joined some 18 months after the group was used (the group related to a moment in time).
If this is the way WhatsApp is going I'd rather less API access for spammers.
WhatsApp has a billion users, I understand that servers are not free.
And he tried until the end to put Telegram outside of the reach of the Russian government, even circumventing the Russian firewall.
I suspect they will kill WhatsApp the same way.
whatsapp is purely for talking to people I know. That's their selling point for me. I don't want to see companies, ads, offers, sweepstakes or curated content. Just me and my family/friends.
I suspect the threshold is a little lower for Whatsapp than Facebook Messenger as WhatsApp has a higher third world user base who have older, slower handsets and will see performance difficulties - hence Facebook's Lite apps for Android.
It can't? My iPhone seems to do this pretty well for SMS; what exactly is it doing to make this work?
I don’t. This isn’t how Facebook works. Paid opt outs drain the highest-earning advertisees from the pool. That removes Facebook’s ability to charge dubious ad rates.
It would be nice if at leat I could pay to keep WA clean (and please let me pay to keep my addresses to myself as well), because leaving it completely is impossible for now. Here in the Netherlands WA is the communications standard, even most company helpdesks are on it.
When I explain to people that giving Facebook access to the contact details of my bank, psychotherapist, doctor, all work colleagues etc., they tend to understand
I don’t give it these permissions. It requires punching in phone numbers, but that adds the right amount of friction to bounce communications to iMessage or a call.
But, I thought that was changing. Is Android not moving to the more granular model?
Google set a deadline for when no new "old" apps are allowed but I didn't pay attention to when that is.
I routinely tell (Android) apps that try to do too much that no they can't have access, but mostly I just uninstall them and use something better.
I installed WA on a new phone last week and it asked for the "Access Contacts" permission.
I denied and the app worked just fine, without showing my contacts.
In general, the trend to optional permissions asked on first use is introduced in more and more apps and it's refreshing.
Fuck these walled gardens.
I wonder how you can manage without WA in the Netherlands. For me, all group events, sports, kids' activities, trips, vacations, family things, etc are managed in a whatsapp group. To "App" has entered daily Dutch vocabulary as a verb (meaning sending a whatsapp message). I'm in dozens of groups (none of them created by me) and participating in anything without it would be very unpractical.
I'll gladly deal with any downsides if that means maintaining the principled standpoint that being a member of society doesn't require owning either an Android or IOS smartphone, being forced to run someone's black-box proprietary software, and agreeing with some foreign mega-corporation's dubious terms of agreement. It's harmful for democratic society as a whole to engender such a dependency.
Besides, if the experience of friends and colleagues is anything to go by, opting in to Whatsapp means you get its downsides too: that one group member who keeps spamming everyone with noise, the constant demand for attention, the gossipy, sometimes down-right stalkerish neighbourhood watch groups (glad my neighbourhood hasn't hung up those sycophantic Whatsapp street signs), not to mention Facebook looking over your shoulder at the metadata level.
Besides, I'm not alone in taking this particular stance here in this country.
This is the reason I have faint hope for government intervention here. Whatsapp has become critical infrastructure and a monopoly in NL. I would want to close my account when ads happen but it’s just too big an impact to do so. Because of the nature of messaging the alternatives are simply not an option unless everyone switches.
None of those people use Whatsapp anymore as they prefer other solutions.
I still have WhatsApp on one device and it is active but nobody contacts me there anymore.
Feels good.
I know half of HN hates Telegram and I like it less than when I started moving (and to my defense that was before WhatsApp improved their crypto from close to nothing to state-of-the-art.)
It has served us well but I don't like the constant bragging combined with breaking a number of best practices and I'm looking for alternatives now and might start moving users to a system that stresses me less sometime during the next year. Alternatives right now are signal, matrix etc.
(Did I regret moving away from WhatsApp after they fixed their crypto? Not at all: they still uploaded all chats and sneakily tried to use all WhatsApp data to feed their spam cannon.
iOS users don't use iMessage since SMS are expensive, and not using Whatsapp would be social ostracisation since Android has a bigger market share than in the US.
In Mexico a lot of businesses have support numbers via Whatsapp. Heck, you can even order food and other stuff like LPG gas.
But iMessage is free. It just uses your phone's internet connection, just like Whatsapp
> But iMessage is free. It just uses your phone's internet connection, just like Whatsapp
Except when you're sending a message to someone who isn't an iMessage user, or if the "Send as SMS" option is enabled, resulting in what you thought was an iMessage becoming an SMS/MMS.
The blue/green colour difference, as well as the light grey text in the input field, isn't always immediately obvious.
By contrast, Whatsapp is always free. You can't send someone a message on Whatsapp and discover it's gone out as an SMS/MMS after the fact.
That said, I still prefer iMessage personally.
https://www.statista.com/statistics/266572/market-share-held...
But in Mexico it's probably between 10% and 20%. I can't seem to find any recent stats.
HOWEVER, I wish they had chosen a different monetization tactic. I would have much rather paid their $1 a year for the service. And given the amount of users they have, that could generate more than enough revenue for them to fund development.
Additionally, monetizing businesses and their integration into the platform also seems like a great idea. The businesses that find value in the platform will more than happily pay for the service.
Or, another idea: why not make me just pay for chat backup (like $1 a year for the app, $10 a year for chat storage, $20 a year for chat and pic storage, $30 a year for chat/pic/video storage) or something like that. That's something that's user AND privacy friendly.
It just makes me really sad that these ads are what Facebook chose. It's an excuse to not innovate and find creative ways to increase their revenue. It seems like they're taking the easy way out.
Plus I think you overestimate Android users' propensity to hand over even $1 in return for no ads.
The reason Apple Music is on Android is that the larger userbase directly gives Apple more bargaining power with labels.
It would just be the same as them selling a 99c app, and the goal would be some of those users for their next phone switching to iPhone. And more high-ground kudos as “the privacy company” which is where their marketing is positioned right now.
Plus I think you overestimate Android users' propensity to hand over even $1
It seems to be a general thing on all platforms, people will pay $1000 for a handset and $5 for a coffee but hesitate to spend 99c on an app.
Apple isn't really in the business of making $1 apps (that I can think of) - just of selling them on behalf of others.
iMessage succeeds on Apply only because it is the DEFAULT SMS app which Apple took over and converted into a full blown Messenger solution. Highly unlikely this playbook will work out on Android.
A combination of awareness that TANSTAAFL and network effects - RIM sold plenty of BB hardware to people who just wanted access to BBM because that’s where all their friends were, so there’s precedent.
I think it’s pretty safe to assume that even if there were a paid option for FB, Insta, WhatsApp they would still do everything they could to monetise personal data, because that’s just the kind of company FB is, rapacious.
The majority at this point in time does not seem to care about privacy, but they do care about the price.
Also, what's the point of moving to just another walled garden? Apple will still keep the service proprietary and closed to third party clients, so you'll also lose the vocal software freedom folk in your approach.
Ahhh...those heady BBM days..BBM Pins and stuff. It's amazing how quickly everything changed for BB.
The parent's key point is going cross-platform to take market share from WhatsApp, not the exact funding model.
Sure it does: it isn’t sending all of my data to an advertising company.
It's only used the first time you register your phone number to whatspp, to send a SMS with a unique code to verify the number. Someone thought it was a good idea to intercept all SMS rather than have the user write the code.
Facebook Messenger and whatsapp dominate the home market. Zoom.us, slack, hangouts and others are popular for business.
I reckon that there would be similar business owners in my predicament who would just like to genuinely notify users. Just like with email, users can have an opt-out option as well.
I think some of this functionality is already there in their Business API (which is quite opaque fwiw).
On the other hand, I can see how this can quickly devolve into spam if used incorrectly (which is inevitable).
Also, before Whatsapp was acquired by Facebook, didn't they charge something like 99 cents per year to provide backups?
FB needs to worry about the next quarter so they might ruin this and allow other apps to take over.
Since most of the world runs on Android, they are already accustomed to ad supported software. While not a welcome change for me, I doubt I will ever encounter them.
I've already tried to move friends and colleagues to Signal. It didn't work.
Maybe I should try again with Telegram. It looks quite nice.
I would tolerate any amount of ads for this service, or alternatively pay maybe $10 a year.
We know one thing. Whats app monetization will be so nefarious and parasitic that there will be a mass exodus. Be there to catch the fall out and provide a responsible replacement that respects data sovereignty of individuals.
The opportunity is inbound now.