WhatsApp still barely makes Meta any money. Can Kunal Shah change that?
Every business Meta builds or acquires is centred around community and. Take Facebook for instance: Mark Zuckerberg built it while he was at Harvard, creating
Every business Meta builds or acquires is centred around community and. Take Facebook for instance: Mark Zuckerberg built it while he was at Harvard, creating a new urban town square on the internet. The web-based application caught the zeitgeist and moved from strength to strength. Back then, the platform solved a distance problem. Friends who relocated after college connected with each other on the platform. Families that moved to a different country shared important moments with relatives in their home countries. The medium acted as digital glue that connected physical relationships online, and in that process created a new way for people to communicate with each other. While Facebook, to its users, was a platform to stay connected with friends and family, to the company, these digitised interactions were a source of revenue as they could be sold to brands for targeted. Every like, comment, and share represented a data point of a user. By 2012, Instagram was still a thirteen-person company with no revenue, but its growth had become impossible to ignore. Twitter offered roughly $500 million for the photo-sharing app, and Facebook moved before that deal could close, with Mr. Zuckerberg having spent months building an informal relationship with founder Kevin Systrom over the phone. Facebook ultimately paid around $1 billion in cash and stock, while letting Instagram keep its name, app, and independence. It was less an acquisition than a pre-emption: own the rival before it can become one. An eye on WhatsApp The same instinct, at a much larger scale, played out two years later when Facebook agreed to buy WhatsApp for close to $19 billion, a company with roughly 50 employees.
Founders Jan Koum and Brian Acton were e Yahoo engineers who had built the app on a near-religious aversion to; both had spent years building ad systems at Yahoo and grown to resent a business model built on mining personal data to sell pop-ups. The night before Mr. Koum was due to meet Google’s Larry Page, Mr. Zuckerberg invited him over and promised WhatsApp would stay independent if Facebook acquired it instead. That promise became Mr. Zuckerberg’s biggest headache. Regulators were told in 2014 that combining Facebook and WhatsApp user data was technically impossible — a claim the European Commission later found to be false. With no allowed inside WhatsApp and no shared data to target them with, Facebook now owned the world’s largest messaging app and still had no way to make money off it. The data round-trip begins That changed in 2016, when WhatsApp updated its terms of service to begin sharing phone numbers and usage data with Facebook, quietly undoing the promise that had cleared the deal. Brussels responded by fining Facebook €110 million in 2017 for misleading regulators about the merger. Mr. Acton left in late 2017; months later, amid the Cambridge Analytica fallout, he publicly urged people to delete Facebook. Koum followed him out in 2018. But the data kept moving — once WhatsApp’s signals could feed Facebook and Instagram’s ad systems, Meta had finally found a way to value WhatsApp’s users without ever running an ad inside a chat. What it built instead was a side door.
The BriefWire