More bad news for Facebook this week, as WhatsApp founder and CEO Jan Koum announced he is planning to leave the company.
According to a report from the Washington Post, Koum is leaving Facebook due to repeated clashes with senior Facebook executives over their desire to weaken encryption and privacy protections within WhatsApp. With growing pressure to monetize its $19 billion acquisition, Facebook had been putting pressure on WhatsApp and its team to open up user data and integrate better into Facebook’s advertising engine.
Koum follows fellow WhatsApp cofounder Brian Acton out the door at Facebook. Acton has recently turned critic of the company that made him a billionaire after leaving Facebook in November. Acton criticized Facebook in the wake of the Cambridge Analytica scandal even promoted the #deletefacebook campaign on social media. He even donated $50 million to a rival messaging app, Signal, that is strictly focused on encryption and user privacy.
With both Koum and Acton out of the way at, Facebook could be bringing more changes to WhatsApp soon. The two cofounders had been the biggest point of resistance in the past to opening up WhatsApp’s user data. However, given the recent privacy furor around Facebook’s many missteps, change will likely be gradual in an effort to avoid inviting regulatory scrutiny.
To understand where WhatsApp is likely headed, it’s instructive to look at where Koum and Facebook’s leadership have clashed in the past. WhatsApp was always somewhat of an odd fit at Facebook given its founders declared opposition to advertising. In a 2012 blog post, they even described online advertising as “an insult to your intelligence.” Instead, WhatsApp charged users a $1 subscription fee after the first 12 months of use to generate some revenue.
But shortly after being bought by Facebook, WhatsApp did away with the $1 fee. In the short term, dropping the fee was a blessing – it allowed WhatsApp to focus on user growth and build what is today the largest messaging app in the world, with some 1.5 billion users. However, over the longer term it set up WhatsApp’s founders for a clash with Facebook leadership.
Much like Google, Facebook is many things, but at its core sits a massive advertising engine fed by data. Most of Facebook’s strategic moves come back to acquiring more data, increasing its ability to monetize more from ads or both. WhatsApp’s business model, focused on user privacy and strong encryption, did neither. While its massive network was a strategic asset for Facebook in that it gave it a strong foothold in emerging markets, the value of this network will ultimately come down to Facebook’s ability to monetize it.
The seeds of this shift started to happen over the last two years. Facebook had WhatsApp change its terms of service so that its social network could access WhatsApp users’ phone numbers as well as data about what kinds of devices they were using. Facebook eventually succeeded in integrating this data into Facebook’s other platforms, enabling the company to collect more data on WhatsApp users’ relationships and feed this back into its ad system.
In January, Facebook launched WhatsApp Business, which allows businesses to create profiles and message customers. In February, it launched payments via WhatsApp in India, where WhatsApp is the top messaging app with 200 million monthly users. Both were features that WhatsApp cofounders had opposed, per the Post.
If these features all sound familiar, they should. They’re all things that Facebook’s Messenger platform had previously added in its efforts to monetize. Facebook launched Messenger for businesses in 2015, the same year it also launched messenger payments.
In fact, if you want to see the future of WhatsApp, it probably looks a lot like Messenger does. Other Messenger features include integrations with apps like Uber and Lyft as well as support for third-party apps like movie tickets, GIF keyboards and more.
With WhatsApp’s massive network in tow, Facebook will want to continue to move WhatsApp toward where Messenger is today, and beyond. After all, even for Facebook $19 billion isn’t cheap, and Facebook will want to have its second largest network (after Facebook itself), start to feed more data into its core advertising engine, if nothing else.
For WhatsApp, you can expect slowly eroding privacy standards, often in the name of launching new features, as Facebook’s quest for monetization starts to focus more on emerging markets over the next few years. The changes will be gradual. Facebook may even deny that they will happen, with the company looking to avoid too much negative attention in the short term. But if you go by Facebook’s history on user privacy and its core advertising-based business model, they’re almost certainly coming.
While WhatsApp and Messenger won’t likely merge, at least not anytime soon, they will start to look and act more and more similarly. In hindsight, we may view Koum’s departure from WhatsApp as Facebook’s “singularity” moment – when its two messaging platforms started to become, effectively, one.
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