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I know of a few people turning off IG and FB due to the volume of ads, when WhatsApp is monetized lots will do the same. Competitors can offer a similar experie

I know of a few people turning off IG and FB due to the volume of ads, when WhatsApp is monetized lots will do the same. Competitors can offer a similar experience to IG, WA and FB with less ads, because the margins are so massive for FB now, and their products are relatively easily replicated. It's VERY easy for user to switch to a competitor compared with other industries. The scale of the network is hard to achieve but we've seen this done a few times before so I don't see why it won't happen again. I predict that FB will continue to push ads for short term profitability, slowly leak active users and find that a bunch of competitors will beat them by accepting a lower margin than FB are willing to accept. The main hope for FB is that they can identify and acquire these competitors before they get a large enough network to take them out.

arethuza 8y ago
Does that mean that the valuation of new companies in this space would be reduced once it becomes clear that the whole market is cyclical and by monetizing you start to kill your product?
- ian0 8y ago
  Id say the value of new earlier stage companies in the space will increase given its obvious FB needs to constantly buy new properties to keep the machine running :)
- fabricexpert 8y ago
  Yes, I think that is the case. New social networks add very little value nowadays, which is a long term indicator that the will not continue to grow in value in the way they have so far. Personally I would not invest in the long term with FB.
typon 8y ago
> It's VERY easy for user to switch to a competitor compared with other industries Not FOR WhatsApp it isn't. I don't know of an app that all my family/friends would switch to if WhatsApp decided to put ads on it. Switching chat apps with your entire contacts list is very cumbersome.
- ec109685 8y ago
  I wonder if it works the other way too. If a few key people in a network migrate to another network and stop using the old, will that force the others to move so that communication remains possible?
- Jommi 8y ago
  Just use telegram? Literally no differences, but even more ease of use.
- fabricexpert 8y ago
  It's a network effect problem, not an app problem. There's no IP or secret sauce, it's just a user migration challenge. It's not easy but it can happen very quickly, it takes a few seconds to download a different app and get setup. There's no vendor lock in from whatsapp.
- 2sk21 8y ago
  It's not as hard you might think. Other messaging services like Telegram and Signal also use phone numbers as the identifiers so it would be relatively easy to switch.
  - typon 8y ago
    I tried my friends to switch to Signal and it failed miserably. Their friends and family are on WhatsApp, so why would they switch? It's very annoying for people to deal with multiple chat apps for multiple groups, especially if some members of those groups are overlapping. I've personally settled with chatting with my SO on Signal and everyone else deleted Signal and moved back to WhatsApp
    - mytherin 8y ago
      Of course, there’s no large reason for them to switch from whatsapp. It’s reliable, free, has no ads and it’s encrypted. Yes, privacy is an issue, but most people don’t care about that all that much. What they do care about is being annoyed or paying. If they give people a reason to move by making the app significantly worse through ads then people will move, and once people start moving it will be fast. Sure, people will need to keep two apps around for a while to deal with stragglers, but that is a minor inconvenience that will become unnecessary fast. A free chat app does not have much lock in. Just look at what happened to e.g. MSN.
2sk21 8y ago
I agree - replicating WhatsApp will not be hard. In any case, Signal and Telegram are waiting in the wings.

arethuza 8y ago

Does that mean that the valuation of new companies in this space would be reduced once it becomes clear that the whole market is cyclical and by monetizing you start to kill your product?

ian0 8y ago
Id say the value of new earlier stage companies in the space will increase given its obvious FB needs to constantly buy new properties to keep the machine running :)
fabricexpert 8y ago
Yes, I think that is the case. New social networks add very little value nowadays, which is a long term indicator that the will not continue to grow in value in the way they have so far. Personally I would not invest in the long term with FB.

typon 8y ago

> It's VERY easy for user to switch to a competitor compared with other industries Not FOR WhatsApp it isn't. I don't know of an app that all my family/friends would switch to if WhatsApp decided to put ads on it. Switching chat apps with your entire contacts list is very cumbersome.

ec109685 8y ago
I wonder if it works the other way too. If a few key people in a network migrate to another network and stop using the old, will that force the others to move so that communication remains possible?
Jommi 8y ago
Just use telegram? Literally no differences, but even more ease of use.
fabricexpert 8y ago
It's a network effect problem, not an app problem. There's no IP or secret sauce, it's just a user migration challenge. It's not easy but it can happen very quickly, it takes a few seconds to download a different app and get setup. There's no vendor lock in from whatsapp.
2sk21 8y ago
It's not as hard you might think. Other messaging services like Telegram and Signal also use phone numbers as the identifiers so it would be relatively easy to switch.
- typon 8y ago
  I tried my friends to switch to Signal and it failed miserably. Their friends and family are on WhatsApp, so why would they switch? It's very annoying for people to deal with multiple chat apps for multiple groups, especially if some members of those groups are overlapping. I've personally settled with chatting with my SO on Signal and everyone else deleted Signal and moved back to WhatsApp
  - mytherin 8y ago
    Of course, there’s no large reason for them to switch from whatsapp. It’s reliable, free, has no ads and it’s encrypted. Yes, privacy is an issue, but most people don’t care about that all that much. What they do care about is being annoyed or paying. If they give people a reason to move by making the app significantly worse through ads then people will move, and once people start moving it will be fast. Sure, people will need to keep two apps around for a while to deal with stragglers, but that is a minor inconvenience that will become unnecessary fast. A free chat app does not have much lock in. Just look at what happened to e.g. MSN.

2sk21 8y ago

I agree - replicating WhatsApp will not be hard. In any case, Signal and Telegram are waiting in the wings.