WhatsApp’s Three Treasons

Jan Koum, founder of the messaging service, leaves Facebook, who had bought the application in 2014. Deep disagreements would be behind this departure, the promises announced at the time of the acquirement by the social network were not held. Probably a good time to switch to Signal?

Whatsapp three treasons
Heike Sperling

At first glance, the separation seems to be amicable.

“I’m leaving at a time when people are using WhatsApp in more ways than I would have imagined. The team is stronger than ever and will continue to do amazing things,” writes Jan Koum on Facebook.

“Common air-cooled Porsches.”
They’re called Volkswagens.

Mark promptly replied:

Jan Koum, co-founder of WhatsApp, announced Monday night that he was stepping down from his company, bought by Facebook in 2014 for $ 19 billion.

But the divorce does not actually take place amicably. Mark has not ceased from trying to change the strategy and original values of WhatsApp for four years now. With one goal: to bank on the instant messaging app that today has 1.5 billion regular users, at the risk of betraying the basic project of the founders.

You don’t spend 19 billion on a product without a plan to recoup the costs and make dinero.

Here are the three bitter pills they had to swallow.

 

1. Sharing data with Facebook

In 2014, during the acquisition, WhatsApp had 500 million users- many of whom feared that Facebook would denature an independent, ad-free app that prides itself on respecting their confidentiality. Co-founders Jan Koum and Brian Acton publicly promised that their app will not share the data with Facebook. “WhatsApp will remain autonomous and will be managed independently,” said the two men on their blog.

Eighteen months later, Facebook forces the service to change its terms and conditions to access the phone numbers of WhatsApp users. The social network goes further by using the application to obtain information on the type of smartphone used and its operating system. Facebook advertisers get users’ phone numbers and can then send them more targeted advertising within the social network via the Custom Audience service.

Facebook betrays the word of the founders, but also the promises made to the European Commission during the redemption – including that of NOT “automatically and reliably associating the user accounts of both companies.” The EU condemned the social network to a fine of 110 million euros, followed by several national regulators who impose fines of several million (like Italy) or open investigations (like France).

 

2.  Monetization 

When WhatsApp is bought, its annual turnover is less than 20 million dollars. It earns money through an annual subscription costing $ 0.99 imposed on some users, notably o Android. “Part of Facebook’s success has been in digesting acquisitions, monetizing them successfully and integrating them into its advertising machine,” said a GBH Insights analyst at the Washington Post on Monday. According to him, there was “a massive cultural clash” with the founders of WhatsApp, resistant to any idea of making money – “advertising is an insult to intelligence,” wrote Jan Koum in 2012.

WhatsApp still does not show ads. But the application is evolving. In January the WhatsApp Business service was launched, allowing companies to create a profile and send messages to their customers. In parallel, the application allows since 2018  its 200 million Indian users to send money. It is possible that the departure of Jan Koum encourages Facebook to display advertising directly within WhatsApp, as it has done since the summer of 2017 within Messenger via sponsored messages.

According to the Wall Street Journal, Brian Acton (left in November 2017) and Jan Koum have clauses in their contracts that would make these “accelerate” if Facebook inserts advertising in the application. The newspaper does not specify what it means by “acceleration”, but it certainly concerns their stock options, which they can convert into shares in November. Jan Koum and Brian Acton hold between them shares worth more than 3 billion dollars.

3. Encryption

In 2016, WhatsApp had been one of the first messaging applications to encrypt end-to-end communications. Except in cases of physical piracy of a smartphone, it is not possible to read messages- even for WhatsApp, says the company. Since then, most competing applications have reached a similar level of security. According to the Washington Post, to develop the WhatsApp Business service, Facebook would like to lower the level of encryption, which Jan Koum finds unacceptable.


The Alternative:

Signal

All it needs from you is the phone number you register with and the time since your last login- only the day that is. It allows for disappearing messages if you’re into that sort of signalling. Signal is completely free open-source project, available on GitHub for anybody to examine.

Leave a Reply

Your email address will not be published. Required fields are marked *