Facebook bought WhatsApp for $16 billion (with a separate $3b for the employees in restricted stock). This is probably one of the biggest and the most costliest purchases in the tech world, overshadowing Facebook’s previous purchase (Instagram, $1B) by a huge margin.
What does this mean to WhatsApp users? That is exactly the information we tried to hunt down. Both Facebook and WhatsApp have noted officially that nothing would change in WhatsApp: the service would continue to function as it is currently. But how much of it is going to remain true?
Prior to WhatsApp, Facebook made one high-profile investment and tried to purchase one other disruptive startup. Instagram was lapped up for $1B but Facebook could not acquire Snapchat, the wildly popular self-destructing image sharing app that has grown into a huge sensation amidst teens. (Snapchat went on to develop several problems due to hacked databases after the failed deal).
With WhatsApp, Facebook’s intention has gotten even more clearer: it wants to be the Google of Communication. It wants to be the base of billions of users who communicate with each other through text, photos, videos and more. Till Instagram, Facebook had been the base for one-to-many relationship of social sharing. With WhatsApp in its portfolio now, Facebook sets foot into personal messaging in clearer terms. Of course, Facebook Messenger exists but it’s not as widely-used as WhatsApp.
The Dreaded Ads/Monetization Model
Facebook’s buyout of Instagram stirred up a strong reaction (especially after the data-policy-mess-up). Part of it was because speculators wrote about how Facebook would destroy the Instagram experience by bringing ads to the service.
Ads did come and there have been contrasting reports of user experiences post the monetization model. But one thing that’s clear is that Instagram has continued to grow and Facebook hasn’t much ruined the overall experience.
The positive bullet point in Facebook’s WhatsApp acquisition is that the messaging service would continue to function independently and the current course remains unaltered. The blogpost by WhatsApp co-founder Kuom mentions that WhatsApp will stick to the core principles of the company. Presumably, this includes a clutter-free (and ad-free) usability.
Facebook hasn’t been aggressive about ads or any monetization model. Every step that it takes has been gradual and incremental rather than revolutionary. I think WhatsApp will continue to remain unmodified by the acquisition at least for a few years down the lane.
So Who Benefits Really?
Obviously, WhatsApp does. Much more than that, Facebook does. With a 450m user-base (WhatsApp), Facebook has actually acquired not a company of 30-odd people or an application that connects millions but a user-base that it can tap into, almost instantly. Between them, they now have over a billion and a half users (loosely counting).
I stumbled on this interesting post on HN. Although it’s a far-fetched notion to assume that Facebook would pull data off your WhatsApp chat and alter the ads accordingly, what is scary is that it is not incapable of doing just that. Consumer behavior and acceptance of what is moral will change over the years. And when it happens, Facebook sure would be at an advantage with a user-base of 450m and counting. (Gmail, for instance, scans your email text [not read, just scan for words] and shows ads accordingly).
To the end-user, nothing changes. WhatsApp continues to be your messaging app that saves you a lot of money in texts.
Although it is so unlike the Instagram buyout, it would be hard for Facebook to keep out of WhatsApp’s operation, process and most importantly, data, for long. All the talk about ‘openness and connectivity’ notwithstanding, Facebook is becoming a giant like Google. Only, their area of operations is instant connectivity.