With the proposed 1$/yr/user it is going to take around 19 years to become profitable (with 1bn paid users). Facebook obviously wants a return earlier.

The founder did take those billions, so not sure what he was expecting to happen, ads looks like the only business model to turn profit quickly in this sort of business.

Besides, there are so many people using WhatsApp in developing countries that wouldn't pay if they can get something similar for free and competition in chat apps is big.