We Don't Sell Ads (2012) | Hacker News Reader

We Don't Sell Ads (2012)

blog.whatsapp.com

197 pointslandhar89 comments

Since Facebook bought Whatsapp I have been upset exactly because of this. I remember having read this post at the time and considered that that was exactly the right way to go. I started using Whatsapp and paying for it in that moment. I convinced many family members and friends to start using it because of this. Then, when they got enough users, they just decided that none of what they promised was important.

Since then, I have actively trying to convince my contacts to move away from WhatsApp, but it is really hard now. This clearly shows that no matter how much trust a company might inspire at a given time, nothing prevents that ten years from now, when everyone is dependent on their technology, they will not change the rules. And nobody will be able to do anything. (Next: Apple, maybe?)

If a company isn't willing to sell a thing, but they are willing to sell the company, then they sell the thing. Just not yet.

> (Next: Apple, maybe?)

I doubt it. Apple doesn't make a dime from user data. Really, the only use they have for it, is usability/A-B testing, and crash dumps (which have been quite useful for me, as a developer).

If FB brought Apple (maybe ten years ago, but today? Fat chance), then that would be a different matter, entirely.

In a way, it's quite fortunate that Apple was considered too radioactive to buy, when it wasn't doing so well.

They do makes lot of money from user data. App Store ads are driven by what your activity. Traffic data for Apple Maps comes from your phone. Spying on competition by knowing what apps are installed, that helps them drive their products. Etc.

They have different data policy for sure than google or Facebook, but they do get your data, and they use it to make more money.

Well their value proposal is not to sell that information.

Apps store ads? They have less data than others, and use it differently, but it’s very much selling access to you, like other types of ads.

Do you mean ads inside the App Store app itself or ads inside apps downloaded from the AS?

Search ads inside app store. Apple limits amount of data it's using about you, but they use your data to deliver those ads to you.

They let you control also using your personal data for it, but they use well known industry dark pattern - you need to opt out. Which is very cynical, given that they force others now to get explicit opt-in from users.

Note - I'm not saying that Apple is as bad others. But they totally do use your data to make more money.

Thanks!

As of now, I think this is a reasonable analysis when it comes to Apple. Although the point of the parent is still valid: regardless of what ideals/promises a company upholds today, they could always change tomorrow (for a variety of reasons beyond the acquisition scenario).

A company that I've been wondering about is Netflix. And a reason why I haven't protested their various price increases over the years is because I'm hoping that they continue to be successful on the subscriptions alone.

> If FB brought Apple (maybe ten years ago, but today? Fat chance)

FB’s market cap wasn’t equal to AAPL’s Jan 2010 market cap until sometime in 2014.

> Really, the only use they have for it, is usability/A-B testing, and crash dumps (which have been quite useful for me, as a developer).

Purely out of curiosity + interest, do they do A/B testing with their software? I can see them A/B testing something ancillary like their online store, but I can't remember an instance where they A/B tested new features or designs or anything like that in their actual user software.

I don't know if they do for shipping products. I have talked to engineers (back when they talked to us peons), and they did it pre-release.

If they started small and suddenly started making 80% of revenue on user data, they might suddenly find themselves becoming a data mining company. On the other hand, they might really come through and prove that they will stick to valuing user privacy even when the possible paycheque is so big.

Culturally, we aren't taught to think critically enough about how businesses operate. In an environment that espouses entrepreneurship to the max, we don't spend enough time talking about if companies lie to us or not, how do they plan to monetize, etc.

There's just no way that Facebook wasn't planning to monetize this platform when they wrote this article. Frankly, situations like this should be treated like deceptive advertising practices.

Just like in the political arena, there are very few consequences to just flat out lie to people, and that's unacceptable.

This article was written before FB acquired whatsapp back when it was still its own company.

That being said, it was "only" 20 months later that FB acquired it, so it's hard to believe that the ideals discussed in this article were no longer in the founders' minds when they accepted the deal.

IIRC, the WhatsApp founders had an agreement with Zuckerberg to keep WhatsApp ad-free. I'm not sure whether that agreement was written, or merely verbal. Nevertheless, Zuck appeared to honor that agreement for a time.

But of course, all roads at Facebook lead to ads – and they were pressured relentlessly to monetize. This is why they both left Facebook, and even left a large pile of $$ on the table:

https://www.forbes.com/sites/parmyolson/2018/09/26/exclusive...

Didn't they refuse facebooks offer multiple times, which is why the actual price of acquisition ended up being something crazy (like $20 billion?)

If anything, one could argue that makes it even _more_ clear that they knew what FB was intending to do with whatsapp and that it wasn't aligned with their principles.

I've also been trying to convince my contacts to move away from WhatsApp. I'm met with lots of resistance, including "but all my friends use it" and "lol I don't care about privacy". I've had a hard time building an argument that's convincing for them.

    Your data isn't even in the picture. We are simply not interested in any of it.

My gosh, how the tide can turn.

https://write.privacytools.io/right-to-privacy/getting-whats...

WhatsApp now collects:

    WhatsApp: Device ID, User ID, Advertising Data, Purchase History, Coarse Location, Phone Number, Email, Contacts, Product Interaction, Crash, Data, Performance Data, Other Diagnostics Data, Payment Info, Customer Support, Product Interaction, Other User, Content.

Yup, classic bait and switch tactics. Act like a saint, get a ton of users, then milk them dry.

For extra points, get paid billions for it and then act outraged when the new owner decides to make back their investment.

Funny how literally the same thing happened with Oculus acquisition by Facebook.

The founders were true to these values and IMO did not just "act like a saint"

They did, however, act like fools by selling to Facebook and assuming WhatsApp stayed ethical.

I'm personally worried Signal will suffer the same fate. It's heavily trusted in its current state, but it could, in time, turn into a Silicon Valley "product" (and so will we). eye roll.

How do they collect purchase history? Do they link your Whatsapp account with purchases you make on shopping apps/sites through the Facebook SDK?

WhatsApp Carts, enabling purchase of tangible things:

https://blog.whatsapp.com/making-it-easier-to-shop-on-whatsa...

Basically trying to catch-up with WeChat in terms of a transactional platform

Brian Acton, the co-founder mentioned at the beginning of the blog post, resigned from Facebook in 2017 over early steps toward this and forfeited $850 million as a result [0].

[0]:https://www.forbes.com/sites/parmyolson/2018/09/26/exclusive...

Wow, talk about putting your money where your mouth is. On the one hand, he had to forsee this happening when he sold to Facebook, and he was worth $3.6 billion at the time of the decision anyways, so it wasn't like me with my 5-figure net worth refusing a jump to 9, it was an abandonment of more like 25%, but still. That's a lot of money to leave on the table.

I was talking with a friend about moving off whatsapp due to the TOS update. I was reminiscing that I had originally bought the app because I had read a blog post from the CEO where he explained that charging for the app was the way they ensured they would never run ads on it.

I was surprised to find out that the blog post is still accessible from whatsapp.com given how things have changed...

I mean it's basically the classic SV way. Build a unsustainable business promising the world. Get traction based on that. Get bought by FAANG. Ride off into sunset & don't look back. Cool guys don't look at explosions/broken promises

WhatsApp charged for their service to make it viable without ads. It isn’t Instagram or Snapchat

On Android, it remained free. That is, even if you didn't pay, it continued to work endlessly.

That said, WhatsApp's plans to make revenue didn't involve showing ads in 2016 (2 years into Facebook acquisition) when they made it officially free:

> Naturally, people might wonder how we plan to keep WhatsApp running without subscription fees and if today's announcement means we're introducing third-party ads. The answer is no. Starting this year, we will test tools that allow you to use WhatsApp to communicate with businesses and organizations that you want to hear from. That could mean communicating with your bank about whether a recent transaction was fraudulent, or with an airline about a delayed flight. We all get these messages elsewhere today – through text messages and phone calls – so we want to test new tools to make this easier to do on WhatsApp, while still giving you an experience without third-party ads and spam.

https://blog.whatsapp.com/making-whats-app-free-and-more-use...

On Android I still remember getting yearly notifications that my "yearly subscription fee" was waived. So I assume they made it free but also wanted the option to go back to subscriptions if wanted.

If I remember correctly, the founders were against making it free. It was one of the reasons they left years ago

When Facebook bought WhatsApp I remember calculating the price they paid per user around $20 / year.

I don't think you can get every single user across the globe to pay that kind of money. $20 is a lot for some of the users of this tool.

Point is, yes they charged for it - but I dont think it was ever a viable part of their business model.

Whatsapp was not "unsustainable" at all. They took pride in squeezing every tiny piece of performance out of their servers - and ran with 50 (!) engineers for 900M users. https://www.wired.com/2015/09/whatsapp-serves-900-million-us...

What was unsustainable was the will to calmly ignore 19 billion dollars sitting on the table. I would certainly fail that test.

I wonder if they considered a legal structure which would tie their hands, precisely to prevent such a thing. Long before they got so big, I mean. Would that be possible?

I would likely also accept that deal. That's a lot of society's resources you get to direct to solve other problems you care about, and also have plenty left over to, you know, build another open source chat app (once contracts expire—https://www.wired.com/story/signal-foundation-whatsapp-brian...).

There's nothing unsustainable about a tracking-less messaging service. Fundamentally, most Whatsapp usage is sending pictures, small audio clips and text. That doesn't take up a lot of bandwidth (= cheap to run), and should be ever cheaper as server costs drop.

Take a look at what Instagram was spending on infrastructure and bandwidth pre-acquisition. WhatsApp has less images but way higher volume. At that scale it's certainly not cheap to run.

Whatsapp’s story is also unique because their acquisition by Facebook was so large. At $19 billion, the founders probably could have attached pretty much any terms to the deal (as formal terms in the purchase agreement) - and still had a $10+ billion offer that made them multi-billionaires.

Permanently enjoin the acquirer from showing ads or sharing data. Heck, require operating independence. Just like any other transaction, terms like these are negotiable. Maybe those reduce the purchase price by $3 billion, or even $5 or $10 billion, but the founders would still be multi-billionaires and they’d also see Whatsapp survive the way they envisioned it. Best of both worlds.

(And if the buyer totally walked rather than reducing the price, at least you’d know their true intention.)

There's a saying that "Every man has his price."

For me personally, I hope that I'll never be offered enough money to betray those who trust me. But I fear that my selling price is far lower than $19B.

> There's a saying that "Every man has his price."

Yup, agreed.

And Acton left after his golden handcuffs were up and put $50M into Signal.

Honestly, the situation could have been worse. Let's hope that $50M now propels the future towards truly decentralized communication.

You really have to consider opportunity cost at that price.

Is the good you're doing via whatsapp enough to outweigh how you could leverage 19B?

> Is the good you're doing via whatsapp enough to outweigh how you could leverage 19B?

That's a very good point. Still, with $19B on the line, I bet there's no shortage of people who would help me rationalize doing something else with that money once it was in my hands.

I tend to have a pretty pessimistic view of human nature, but maybe I'm unfairly projecting my own weaknesses onto the rest of humanity.

But you've set a precedent that you will cut and run, which negatively affects how people coordinate with you on things.

Look at Google. We have a bunch of people who don't want to use their new APIs because they've experienced those APIs going away in the past. Ironically, by resisting using them they create a self fulfilling prophecy. An API that lasts 3 years is not more likely to last 6 years than an API that has been around for 1 year will last for 4. By delaying they've just put themselves closer to the drop dead date.

Point is, that dynamic hurts everybody, not just the people avoiding engaging with someone with a questionable track record.

The only reason it got to 19B was because Brian Acton refused to cut and run.

He refused to sell repeatedly.

19B is an insane price. Clearly the buy was worth it for FB so it's not mispriced, but really think about the 19B.

They had 30 employees? I think people that worked there for one year cleared $140M.

If someone held out until 19B I would trust them to be more principled than 99% of founders.

Sure, there's lots to consider. But as a user of whatsapp since they wrote this article, and that has been trying to get my friends and family off whatsapp since they got acquired by FB, I am terribly sorry that they took that deal.

Only if you reduce ethics to a math problem.

You have to make decisions somehow: https://en.wikipedia.org/wiki/Utilitarianism

It's not perfect, but it's not an easy question and there isn't an easy answer.

While everyone has their price, my point is a little more subtle: they probably could have had their price met and also codified a set of post-transaction terms that preserved their vision.

For a founder-controlled company that raised capital so late, is selling for $19 billion much better than selling for $15 or $13 billion and knowing your creation will solve the problem it was meant to? Any of these outcomes leave the founders with many billions (and leave the few employees set for generations).

Contrast with a $2-3 billion acquisition like Oculus or Instagram. They were huge but still in the range where 20% or 30% less (for restrictive deal terms) might actually matter, if only barely. Whatsapp's deal was so large that there's not even the tiniest practical tradeoff from 20% less.

WhatsApp has been owned by Facebook longer than it has been independent. The founders aren’t responsible for what Facebook, Inc has done for it.

You can try to attach a bunch of clauses to try and imprint your legacy, but at the end of the day if you sell your stake you sell your stake. You aren’t in the room anymore.

And if you aren’t in the room, you aren’t responsible, either. I can’t help if someone buys my car and crashes into a telephone pole. I didn’t cause that damage to the world by selling my car. Maybe, I could have found a more qualified driver if I accepted less payment for it! Or, my interested buyer upon seeing my clauses and restrictions might say “thanks but no thanks, no longer interested.”

To clarify, I wasn't trying to imply that they were responsible in any way. As you said, they aren't.

Rather, I was saying that from their public statements and actions, they weren't satisfied with the outcome, and they may have been able to increase the chances that it looked like their vision (with essentially no tradeoff to them - they aren't going to spend the seventh billion, or probably even the third billion). As you said, no contract terms can guarantee an outcome, but terms could have increased the chances.

I see I see. I wasn’t really aware they weren’t happy about it, perhaps I could have been less lazy and checked.

All the more reason to never sell if you want to see out your vision. Facebook was certainly on the other end with acquisition offers not so long ago.

I’m also not sure that acquiring companies tend to like to be dealing with too many restrictive terms. Any kind of purchase is going to compete against alternatives, including building your own.

We don't sell ads but we are selling ourselves so you can sell ads in the future.

I doubt that was the intent at the time. Sure they'd be looking for ways to monetize, but could the co-founder in 2012 have predicted what FB as an entity would become ~10 years later?

Yes, if someone offers to pay you $20B for your chat app, it’s not out of charity.

I’m not blaming them for selling out for $20B, I would have done the same. But I won’t believe they didn’t know what was going to happen.

Facebook was making money from ads when they sold WhatsApp to FB. They had to know that was the plan.

I don't fault them for selling, I fault everyone else for assuming it would always be ad free after the sale.

Well, if it would been a free app, OK. But one did pay for this feature, isn't it. So I want my dollar back.

That's a fair point in general, but I think that by the time FB acquired whatsapp the writing was in the wall and I feel that the founders probably knew where things were headed.

This is the timeline as I recall it (and from quickly googling a couple of articles), feel free to correct me if I'm getting things wrong:

2012: this article

2014: FB acquires whatsapp

2016: Whatsapp becomes free (drops the $1 purchase fee)

2018: Jan Koun and Brian Acton leave FB

If WhatsApp had no users, they wouldn't have been worth much. They didn't sell ads, they sold all their users.

Similarly hilarious to read today is Google's "The Meaning of Open" (2009): https://publicpolicy.googleblog.com/2009/12/meaning-of-open....

And of course, Appendix A of "Anatomy of a Search Engine": http://infolab.stanford.edu/~backrub/google.html

Everyone has their price, and corporations selling out their values for more money is basically a universal truth.

Brian Acton selling to FB is in a way a tragic story.

I understand why he did it, at some point it becomes irresponsible not to take the money given the opportunity cost (and he did give $50M to signal). Steven Levy has a funny bit about it in his excellent book Facebook: The Inside Story. When someone offers you 19 billion to violate your principles, you have to wonder what you can do with that money and maybe you can do more good than you could with whatsapp.

Plus housing in Palo Alto is expensive: https://www.dirt.com/moguls/tech/brian-acton-house-palo-alto...

I wrote an overly long feudal allegory about this based on pillars of the earth (I know, but it was fun to write): https://zalberico.com/essay/2020/07/14/the-serfs-of-facebook...

His last tweet still stands: https://twitter.com/brianacton/status/976231995846963201?s=2...

###

“Do no knights strike out on their own?”

Philip was quiet for a moment. He pointed across a vast vista to a large castle in the distance adjacent to that of their own Earl Zuckerberg’s. “That is the castle of Sir Brian Acton of the former Earldom of WhatsApp. Sir Acton was an idealistic farmer who rejected the ways of our earl. He promised the serfs he would take no part of their data harvest they produced from the land he provided them, and instead the serfs even paid him a small cash fee for his protection. He had no knights to watch and report on his people and no heralds spreading pronouncements.”

“What happened?”

“He was too successful. Earl Zuckerberg saw many of his serfs begin to leave his lands to work the lands of Sir Acton (at the time he was known as Farmer Acton). This was a risk to the power of Zuckerberg’s earldom, since an earl without serfs to tend to the data fields has no harvest to interest others. In the end he offered Sir Acton a knightship and such enormous wealth that he could not refuse. It’s said he now lives in that vast castle alone, is rarely seen, and rarely speaks. The serfs that were in agreement with him now belong to Earl Zuckerberg as they had before, their deal was broken, and once again they tend to our earl’s data harvest.”

“Are there no others?”

“Sir Acton was just the most noble, and his fall the most tragic. Others like Sir Chris Coyne of the former Earldom of Keybase promised their serfs protection and then cruelly sold them to the Earldom of Zoom, which is closely tied to the Eastern Kingdom, a hostile land ruled by a tyrant king where the earls are weak and only serve to do the king’s bidding. There the serfs are forced to grow only what the king has allowed and serfs that refuse are dealt with swiftly and harshly. While in our kingdom farmers can choose to try to strike out on their own (though most choose not to), in the Earldoms of Zoom or TikTok, nothing can happen without the blessing of their king.”

Haha I love your literal take on digital feudalism!

The allegory actually fits really well.

I had fun working through it :)

There’s continuous discussion about how WhatsApp sold off its ideals but i think that in the reality that we live in that citizens are not informed about the services they consume the law should protect them as much as possible. A good data law is feasible in many of the continents WhatsApp operates in and with it companies won’t abuse user data because they would simply could not

Almost all people their principles have a price. With an amount of money thrown at you, you cannot spend in a lifetime, most people bend. The stance they were defending or the problems they were fighting are all of a sudden no longer an issue they will ever face. Why would they bother?

Think about your biggest stance. Be it climate change, political affiliation or controversial issues like abortion. How much money do you need to receive to never talk or be bothered about it again? With a few billion dollars in your pocket, most issues are no longer a concern or anything you will care about reasonably.

June 18, 2012

Added 2012 to the title. Thanks for the call out.

20 months later they sold to Facebook for $19 billion. How can this statement be taken seriously? Obviously Facebook was paying for advertising potential here.

https://www.wsj.com/articles/facebook-to-buy-whatsapp-for-16...

Are we Matrix yet?

People should be aware that Brian Action is also the founder and chairman of Signal Foundation.

Imagine you wrote a post like this, and then you get an offer for $19B. I really wonder how many here would sincerely FU that (anyone who saw FB doing the move knew what they were going for)

I'd try to guess that the next move will be facebookification of whatsapp, i.e. whatsapp will slowly morph into a FB client, will all the buzz and whistles.

This page says they "charge" for WhatsApp, at least in 2012. I didn't know that. What were they charging for? To buy the app or something else?

There was a free year and then a yearly usage fee. I think the iPhone version was always a single pay purchase.

Just convinced my family to delete WhatsApp.. that was not easy but I dont want such a large unethical company continue to dictate our lifes in future.

FB seems to have a too-good ability to swindle entrepreneurs into believing they will keep their independence. Oculus suffered the same fate.

https://deletewhatsapp.com/

19 billion dollars for WhatsApp. I cant think of a better deal than that on entire human history.

Why are you all surprised by this -- didn't you see the Tyler Durden quote? It was right there at the top of the page!

I guess everyone's an edgy-movie-quote-quoting-internet-hacker-bro until the man from Silicon Valley offers your $19Billion.

I wonder how many of those billions can we equate to Tyler Durden? Must of been worth at least 8 IMO.

WebRTC could be used for a messaging app?

Removed whatsapp today, hello Signal.

that was long time ago ;-)

This article itself is marginally different from an ad. What's the point of this article? To inform, or to sway?

For context: this was a blog post from the founders of whatsapp prior to their acquisition by Facebook, where they explained why they had chosen to make whatsapp a paid app.

Reply on news.ycombinator.com