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The founder of Whatsapp (1) claims that Facebook promised Whatsapp would not be monetised, and that Facebook and and Whatsapp's data would not be combined. Thi

The founder of Whatsapp (1) claims that Facebook promised Whatsapp would not be monetised, and that Facebook and and Whatsapp's data would not be combined. This information was also provided to European antitrust regulators (2) missed out on $850 stock option grants vesting by quitting early over disputes with Facebook about monetisation strategy involving advertising (3) promoted #deletefacebook on Whatsapp following the Cambridge Anlalytica scandal (4) Donated $50m to the non-for-profit alternative, Signal. https://en.wikipedia.org/wiki/Brian_Acton https://en.wikipedia.org/wiki/Brian_Acton

suyash 6y ago
At this point Facebook's best interest is to sell WhatsApp or make it a separate entity, completely out of Facebook's reach and control if they want to win users trust again.
- Kadin 6y ago
  I can't really see why Facebook would care; even if they drive off 50% of WhatsApp's userbase, that's 50% they get to keep, analyze, and monetize. If they made WhatsApp a separate entity, they lose 100% of its users. Half of something is better than all of nothing. The acquisition cost of WhatsApp is sunk at this point—the only thing left is to wring as much money out of it as possible.
  - jonny_eh 6y ago
    It's putting them at risk with regulators.
fastball 6y ago
Technically it's not a donation, it's a 0% interest loan that doesn't need to be repaid until 2068. And $50M was the initial amount, but it's up to ~$100M now. https://en.wikipedia.org/wiki/Signal_Foundation https://en.wikipedia.org/wiki/Signal_Foundation
- ant6n 6y ago
  Sounds like mostly a donation to me. In 70 years, assuming 2% inflation, inflation will have reduced the value of the debt by 70%.
  - latexr 6y ago
    > In 70 years 2068 is in 47 years. A long way away, yes, but still a big difference.
- Niten 6y ago
  This is a tangent, but what's the financial rationale for setting up this kind of an arrangement instead of a donation?
  - graiz 6y ago
    Loans get paid back... donations don't. An organization that takes donations (like wikipedia) will have to keep asking for donations... while an organization that has a debt can take the time to figure out a revenue model not driven by ads to allow them to repay the debt.
    - crusty 6y ago
      Wikipedia's average donation is tiny. That's why they keep asking. The way you've written this it suggests that if instead of giving wikipedia a $2 donation, we have them $2 no-interest loans, weed be helping them prepare for the future and they wouldn't have to ask for more donations (or loans) from us. That's not how it works.
  - OJFord 6y ago
    To whom? To the 'donor' (as it were) it's probably (jurisdiction varies, IANA tax advisor, etc.) a decent inheritance tax avoidance (obligatory 'as opposed to evasion') - helps out a cause he believes in, while leaving the capital (hopefully/in theory) for his inheritants. To the recipient.. I don't know why you'd prefer it to a (stipulation-free) donation, but in general it's probably easier to get big loans than big donations.
deleted 6y ago
[deleted]
mkl 6y ago
Re (2), it was $850 million.
tinyhouse 6y ago
typo: $850 million.
tinyhouse 6y ago
He seems like an amazing guy and that we need more people like him in tech, esp in leadership positions. However, I'm not sure why he was so against monetization. If whatsapp was still an independent company, they would have to monetize somehow. Why cannot FB monetize? As a user of whatsapp I wouldn't even care if the showed ads in big group chats. As long as there would be zero tracking or leaking of data and ads would be solely based on location and maybe chat info.
- eps 6y ago
  WhatsApp had a $1 annual fee and 400M users prior to FB acquisition. Just FYI.
  - tinyhouse 6y ago
    I know that but it's not that they had $400M in revenue. See https://news.ycombinator.com/item?id=25666270 https://news.ycombinator.com/item?id=25666270 FB never charged for whatsapp for a good reason.
    - themoose8 6y ago
      In the UK I remember it being both a small required annual fee and very popular - but that's just as anecdotal as the comments in your link.
    - Daho0n 6y ago
      They did/do, just not in direct payment.
- pmlnr 6y ago
  > If whatsapp was still an independent company, they would have to monetize somehow. No, they wouldn't. This thinking is what has lead the world where it is. Say you have 2 billion (10^9) users paying $1 per year. You follow inflation. That's 2 billion a year. That covers a lot of workforce, and a lot of servers. This idea of infinite growth boggles me - how can people with math background insist on such impossible thought?
mancerayder 6y ago
"In January 2009, Koum bought an iPhone and realized that the then seven-month-old App Store was about to spawn a whole new industry of apps. He visited his friend Alex Fishman and talked about developing an app.[11] Koum almost immediately chose the name WhatsApp because it sounded like "what's up", and a week later on his birthday, Feb. 24, 2009, he incorporated WhatsApp Inc. in California." .. "In 2014, Koum and Brian Acton agreed to sell WhatsApp to Facebook for approximately US$19 billion in cash and stock.[9] Forbes estimates that Acton held over 20% stake in the company, making his net worth around $3.8 billion.[12] According to Acton's personal Twitter feed, he was turned down for employment by both Twitter and Facebook in 2009." 3.8B in 5 years of work? It's scarcely conceivable to me after 20 years of salaried grind. These people are well-connected (fine), but they're also geniuses at spotting opportunities.
- jeffnappi 6y ago
  Geniuses, maybe, but also exceedingly lucky - right place, right time, right idea, right connections etc :)
  - brutus1213 6y ago
    The tech behind whatsapp was pretty cool IIRC .. that's how I got interested in Erlang/Beam. These people were not your average CS grad or even your average googler.
    - patrickaljord 6y ago
      WhatsApp could have been coded in any language. The first version was a very simple app but it promised free SMS alternative with some great marketing campaign. Still amazing how they managed to grow the user base using this marketing when there were tons of apps doing the same thing.
      - drevil-v2 6y ago
        Where can I read more about this?
throwaway6497 6y ago
I think you meant $850 million stock option grants
1vuio0pswjnm7 6y ago
Because Facebook acquired WhatsApp we never got to see what would have happened with WhatsApp as more and more people discovered it. WhatsApp was charging users some token amount like $1 before it merged with Facebook. Could that sort of small donation model work to keep a service like WhatsApp (or Signal) running? If 50 million people donate $1 to Signal, does he get his $50 million donation refunded. Shares of FB are down^1 while shares of SIGL are up (again).^2,3 1. https://finance.yahoo.com/quote/FB/history?p=FB https://finance.yahoo.com/quote/FB/history?p=FB 2. https://finance.yahoo.com/quote/SIGL/history?p=SIGL https://finance.yahoo.com/quote/SIGL/history?p=SIGL 3. https://news.ycombinator.com/item?id=25770464 https://news.ycombinator.com/item?id=25770464 <-- Suggested reading before replying ;)
- mfenniak 6y ago
  SIGL is not the makers of the Signal communication app. SIGL is a company called Signal Advance (https://www.signaladvance.com/ https://www.signaladvance.com/), which makes medical and industrial systems. Signal, the app (https://signal.org/en/ https://signal.org/en/), is a 501c3 nonprofit.
- piva00 6y ago
  Wikipedia ran in 2018 on about US$ ~80 million, can't see why WhatsApp or Signal can't keep up a messaging service for much more than that. Even more given WhatsApp history of being a very efficient company, supporting hundreds of millions of users with 50 engineers.

suyash 6y ago

At this point Facebook's best interest is to sell WhatsApp or make it a separate entity, completely out of Facebook's reach and control if they want to win users trust again.

Kadin 6y ago
I can't really see why Facebook would care; even if they drive off 50% of WhatsApp's userbase, that's 50% they get to keep, analyze, and monetize. If they made WhatsApp a separate entity, they lose 100% of its users. Half of something is better than all of nothing. The acquisition cost of WhatsApp is sunk at this point—the only thing left is to wring as much money out of it as possible.
- jonny_eh 6y ago
  It's putting them at risk with regulators.

fastball 6y ago

Technically it's not a donation, it's a 0% interest loan that doesn't need to be repaid until 2068. And $50M was the initial amount, but it's up to ~$100M now. https://en.wikipedia.org/wiki/Signal_Foundation https://en.wikipedia.org/wiki/Signal_Foundation

ant6n 6y ago
Sounds like mostly a donation to me. In 70 years, assuming 2% inflation, inflation will have reduced the value of the debt by 70%.
- latexr 6y ago
  > In 70 years 2068 is in 47 years. A long way away, yes, but still a big difference.
Niten 6y ago
This is a tangent, but what's the financial rationale for setting up this kind of an arrangement instead of a donation?
- graiz 6y ago
  Loans get paid back... donations don't. An organization that takes donations (like wikipedia) will have to keep asking for donations... while an organization that has a debt can take the time to figure out a revenue model not driven by ads to allow them to repay the debt.
  - crusty 6y ago
    Wikipedia's average donation is tiny. That's why they keep asking. The way you've written this it suggests that if instead of giving wikipedia a $2 donation, we have them $2 no-interest loans, weed be helping them prepare for the future and they wouldn't have to ask for more donations (or loans) from us. That's not how it works.
- OJFord 6y ago
  To whom? To the 'donor' (as it were) it's probably (jurisdiction varies, IANA tax advisor, etc.) a decent inheritance tax avoidance (obligatory 'as opposed to evasion') - helps out a cause he believes in, while leaving the capital (hopefully/in theory) for his inheritants. To the recipient.. I don't know why you'd prefer it to a (stipulation-free) donation, but in general it's probably easier to get big loans than big donations.

deleted 6y ago

[deleted]

mkl 6y ago

Re (2), it was $850 million.

tinyhouse 6y ago

typo: $850 million.

tinyhouse 6y ago

He seems like an amazing guy and that we need more people like him in tech, esp in leadership positions. However, I'm not sure why he was so against monetization. If whatsapp was still an independent company, they would have to monetize somehow. Why cannot FB monetize? As a user of whatsapp I wouldn't even care if the showed ads in big group chats. As long as there would be zero tracking or leaking of data and ads would be solely based on location and maybe chat info.

eps 6y ago
WhatsApp had a $1 annual fee and 400M users prior to FB acquisition. Just FYI.
- tinyhouse 6y ago
  I know that but it's not that they had $400M in revenue. See https://news.ycombinator.com/item?id=25666270 https://news.ycombinator.com/item?id=25666270 FB never charged for whatsapp for a good reason.
  - themoose8 6y ago
    In the UK I remember it being both a small required annual fee and very popular - but that's just as anecdotal as the comments in your link.
  - Daho0n 6y ago
    They did/do, just not in direct payment.
pmlnr 6y ago
> If whatsapp was still an independent company, they would have to monetize somehow. No, they wouldn't. This thinking is what has lead the world where it is. Say you have 2 billion (10^9) users paying $1 per year. You follow inflation. That's 2 billion a year. That covers a lot of workforce, and a lot of servers. This idea of infinite growth boggles me - how can people with math background insist on such impossible thought?

mancerayder 6y ago

"In January 2009, Koum bought an iPhone and realized that the then seven-month-old App Store was about to spawn a whole new industry of apps. He visited his friend Alex Fishman and talked about developing an app.[11] Koum almost immediately chose the name WhatsApp because it sounded like "what's up", and a week later on his birthday, Feb. 24, 2009, he incorporated WhatsApp Inc. in California." .. "In 2014, Koum and Brian Acton agreed to sell WhatsApp to Facebook for approximately US$19 billion in cash and stock.[9] Forbes estimates that Acton held over 20% stake in the company, making his net worth around $3.8 billion.[12] According to Acton's personal Twitter feed, he was turned down for employment by both Twitter and Facebook in 2009." 3.8B in 5 years of work? It's scarcely conceivable to me after 20 years of salaried grind. These people are well-connected (fine), but they're also geniuses at spotting opportunities.

jeffnappi 6y ago
Geniuses, maybe, but also exceedingly lucky - right place, right time, right idea, right connections etc :)
- brutus1213 6y ago
  The tech behind whatsapp was pretty cool IIRC .. that's how I got interested in Erlang/Beam. These people were not your average CS grad or even your average googler.
  - patrickaljord 6y ago
    WhatsApp could have been coded in any language. The first version was a very simple app but it promised free SMS alternative with some great marketing campaign. Still amazing how they managed to grow the user base using this marketing when there were tons of apps doing the same thing.
    - drevil-v2 6y ago
      Where can I read more about this?

throwaway6497 6y ago

I think you meant $850 million stock option grants

1vuio0pswjnm7 6y ago

Because Facebook acquired WhatsApp we never got to see what would have happened with WhatsApp as more and more people discovered it. WhatsApp was charging users some token amount like $1 before it merged with Facebook. Could that sort of small donation model work to keep a service like WhatsApp (or Signal) running? If 50 million people donate $1 to Signal, does he get his $50 million donation refunded. Shares of FB are down^1 while shares of SIGL are up (again).^2,3 1. https://finance.yahoo.com/quote/FB/history?p=FB https://finance.yahoo.com/quote/FB/history?p=FB 2. https://finance.yahoo.com/quote/SIGL/history?p=SIGL https://finance.yahoo.com/quote/SIGL/history?p=SIGL 3. https://news.ycombinator.com/item?id=25770464 https://news.ycombinator.com/item?id=25770464 <-- Suggested reading before replying ;)

mfenniak 6y ago
SIGL is not the makers of the Signal communication app. SIGL is a company called Signal Advance (https://www.signaladvance.com/ https://www.signaladvance.com/), which makes medical and industrial systems. Signal, the app (https://signal.org/en/ https://signal.org/en/), is a 501c3 nonprofit.
piva00 6y ago
Wikipedia ran in 2018 on about US$ ~80 million, can't see why WhatsApp or Signal can't keep up a messaging service for much more than that. Even more given WhatsApp history of being a very efficient company, supporting hundreds of millions of users with 50 engineers.