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Comment by bikamonki | Hacker News Reader

FB paid something like 20bn for Whatsapp almost 6 years ago. Something like 4bn was paid in cash. How do you make that money back if: a) users do not pay a subscription and b) ads are not printed in the app? You leverage the app's immense user base asking businesses to pay for API services so they can implement chat-bots, notifications, in-app tools, etc.

Why using res-sellers, like carriers use re-sellers to sell SMS integration? Distribution and fair-use control. First, companies like Twilio are the natural partners to sell one more channel to customers that already integrate to SMS. Second, partners will help enforce and control anti-spam efforts. If opening Whatsapp API turns it into a spam jungle like email or sms, it will certainly lose its appeal and users will start switching to the next new spam-free chat app.

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You make the money back by maintaining a monopoly - essentially the only reason they paid so much for WhatsApp.

They don't necessarily need to put ads in the app. They can simply transfer that personal information to their larger people profiles making their existing ad networks more valuable. It could additionally be simply a play to keep someone _else_ from getting said data. (I think your argument still makes sense, just another angle on that part).

The privacy law implications (GDPR, the new California law, etc.) would probably crush Facebook as a company if they started doing that.

They already paid over 100 million for just making false promises when they bought WhatsApp, now that the EU has sharpened their blades to take on big data farms like Google and Facebook, doing something like that would be suicide for FB. Any additional data farming would probably attract auditors and lawsuits that Facebook can't get out of so easily anymore.

Facebook would need to put a lot of work into following the GDPR (because someone using an Asian VPN is still protected, so IP based geoblocking won't work) to prevent a fine. It would be a very risky move.

I don't think Facebook is going to sell private WhatsApp information any time soon.

I'm mostly speculating but, they wouldn't be selling the data, they would be selling access to their ad network that has models built off that data used to match ads to people. If they have a high(er) conversion rate, they can charge quite the premium for this information. Similarly, if they could merely keep people in their platform (WhatsApp), nobody else has that information -- same effect.

(Also speculating) if that's more or less how it works, and an ads conglomerate like Google or Facebook is worth hundreds of billions, then even a fine of a billion dollars wouldn't be enough to deter them from this activity.

None of this is meant to stir up controversy or be negative or anything, I just think its an interesting mental exercise to consider this scenario and these motivations.

> Something like 4bn was paid in cash

I assume you don't mean this literally? 1bn in $100 notes weighs over 1 ton.

"Cash" seems to have been misused as its own opposite so often as to have become an entirely useless word now, much like "literally".

I assume they just meant "money"?

Well probably just a liquid source of funds transferred directly to an account vs. some other financial instrument. No one is going to do a deal like that in physical cash.

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