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> When Facebook bought WhatsApp for $19 billion in 2014, the messaging app had a clear focus. No ads, no games and no gimmicks. This sort of analysis is very s

> When Facebook bought WhatsApp for $19 billion in 2014, the messaging app had a clear focus. No ads, no games and no gimmicks. This sort of analysis is very surface-level I think. My impression is WhatsApp offered that by running on VC money and had no plan to run an actual business. That's not a question of focus. It's an unsustainable, please monetise me later land grab.

ASalazarMX 1y ago
Youtube was the same. Both are products that people really want to use.
- timeon 1y ago
  Also Instagram and others. It was about capturing and selling community.
- robertlagrant 1y ago
  I agree, although that's too vague. YouTube has a different appeal. But my point is more that I wouldn't say YouTube got ads because it stopped having a focus on not having ads. It needs to pay for itself.
ndriscoll 1y ago
How was it unsustainable? As far as I know they were simply competent. They charged $1/year, so had ~half a billion in revenue, right? They probably could've bumped that to $2-$5/year with similar uptake. And they ran it with ~500 servers and 50 employees 12 years ago, so could probably do the same with ~50 or fewer servers today.
- robertlagrant 1y ago
  They're doing a lot more now, though. Voice notes; multi-way video and audio calls; e2ee. And they barely even charged $1/year. I never paid for it.
- YetAnotherNick 1y ago
  Whatsapp revenue was $10M and the cost of revenue was $52M, with total net loss of $138M/yr just before facebook acquisition. [1]: https://www.sec.gov/Archives/edgar/data/1326801/000132680114000047/exhibit991auditedwhatsappi.htm https://www.sec.gov/Archives/edgar/data/1326801/000132680114...
  - jpalawaga 1y ago
    they also never required many of their users to pay. whatsapp allegedly cost $1 a year, and I never paid a dime despite using it for years.
- RestlessMind 1y ago
  They never charged everyone. I was on Android back then and never paid a dime. Neither did anyone I know who was using Whatsapp on Android
  - xeromal 1y ago
    They did charge me and I gladly paid.
  - lomase 1y ago
    It was free on Android but paid on IOS.
BiggerChungus 1y ago
Respectfully, clearly you aren't familiar with Jan and Brian's history of public statements. Even for years after they were acquired by Meta, Jan refused to allow advertising and kept pushing the $1 dollar per user subscription fee. Sheryl nixed it b/c it was "not scalable." VC's may have the mindset that the founders will eventually acquiesce to ads, but also they didn't really care b/c all they wanted was an exit, which they got. The founders, however, were never interested in an ad business and hold that POV to this day.
- robertlagrant 1y ago
  > The founders, however, were never interested in an ad business and hold that POV to this day. Fair enough, but the founders don't necessarily make these decisions. I wasn't particularly referring to them. If they got VC money (I don't know if they did or not) then the VCs must've had something in mind to get a decent return on their risk.
  - otterley 1y ago
    They did have VC funding from Sequoia Capital. (https://www.crunchbase.com/organization/whatsapp/financial_details https://www.crunchbase.com/organization/whatsapp/financial_d...)
- eviks 1y ago
  > VC's may have the mindset that the founders will eventually acquiesce to ads > history of public statements. Actions speak louder. He did acquiesce - he sold to an ad-financed company. > and hold that POV to this day. You can hold any POV when nothing depends on it.
- udev4096 1y ago
  Brian Acton is a fucking sell out. Peroid. He deserves no sympathy and I cannot believe how he was appointed executive chairperson of signal foundation
dakial1 1y ago
https://techcrunch.com/2014/02/19/whatsapp-will-monetize-later/ https://techcrunch.com/2014/02/19/whatsapp-will-monetize-lat... Zuck Says Ads Aren’t The Way To Monetize Messaging, WhatsApp Will Prioritize Growth Not Subscriptions "Monetization was the big topic on today’s analyst call after Facebook announced it acquired WhatsApp for a jaw-dropping total of $19 billion. That’s $4 billion in cash and $12 billion in stock, and it reserved $3 billion in restricted stock units to retain the startup’s employees. But Facebook CEO Mark Zuckerberg, CFO David Ebersman, and WhatsApp CEO Jan Koum all said that won’t be a priority for the next few years. And when the time does come to monetize aggressively, it won’t be through ads"
like_any_other 1y ago
It's called bait-and-switch - lure users in away from (possibly FOSS, e.g. Matrix) competitors, and when you have enough network effects that switching becomes hard, spring the trap.
- udev4096 1y ago
  People I know on matrix hardly ever use WhatsCrap or migrated to it. Most of them either stick to Signal or just matrix
rchaud 1y ago
Have you considered that you may be making the surface-level analysis? I paid $3 for Whatsapp in 2010 on the Blackberry app store. They had a staff of ~20 people handling messages across almost 200 countries.It became the defacto global messaging app because it was available on every single platform, not just the Apple/Google duopoly VCs cared about.
- hn_throwaway_99 1y ago
  Sorry, but the original commenter is correct. They received relatively small amounts of seed funding in 2009 and later charged a nominal amount to cover text verification, but they still were a classic VC-funded play: receive tens of millions in VC dollars to operate at a loss for years to build market dominance. From the Wikipedia page: > In April 2011, Sequoia Capital invested about $8 million for more than 15% of the company, after months of negotiation by Sequoia partner Jim Goetz.[63][64][65] > By February 2013, WhatsApp had about 200 million active users and 50 staff members. Sequoia invested another $50 million, and WhatsApp was valued at $1.5 billion.[26] Some time in 2013[66] WhatsApp acquired Santa Clara–based startup SkyMobius, the developers of Vtok,[67] a video and voice calling app.[68] > In a December 2013 blog post, WhatsApp claimed that 400 million active users used the service each month.[69] The year 2013 ended with $148 million in expenses, of which $138 million in losses. I mean, when Facebook bought WhatsApp for billions, what did people expect? How else were they going to monetize?
- lou1306 1y ago
  They also ran on Symbian and Windows Phone. I know because I used both ports.
- mtlynch 1y ago
  >I paid $3 for Whatsapp in 2010 on the Blackberry app store. A $3 one-time payment (which I'm guessing is about $2.75 after BlackBerry app store fees) is not sustainable for lifetime access and updates on a service that needs 4-5 nines of service availability and data integrity.

ASalazarMX 1y ago

Youtube was the same. Both are products that people really want to use.

timeon 1y ago
Also Instagram and others. It was about capturing and selling community.
robertlagrant 1y ago
I agree, although that's too vague. YouTube has a different appeal. But my point is more that I wouldn't say YouTube got ads because it stopped having a focus on not having ads. It needs to pay for itself.

ndriscoll 1y ago

How was it unsustainable? As far as I know they were simply competent. They charged $1/year, so had ~half a billion in revenue, right? They probably could've bumped that to $2-$5/year with similar uptake. And they ran it with ~500 servers and 50 employees 12 years ago, so could probably do the same with ~50 or fewer servers today.

robertlagrant 1y ago
They're doing a lot more now, though. Voice notes; multi-way video and audio calls; e2ee. And they barely even charged $1/year. I never paid for it.
YetAnotherNick 1y ago
Whatsapp revenue was $10M and the cost of revenue was $52M, with total net loss of $138M/yr just before facebook acquisition. [1]: https://www.sec.gov/Archives/edgar/data/1326801/000132680114000047/exhibit991auditedwhatsappi.htm https://www.sec.gov/Archives/edgar/data/1326801/000132680114...
- jpalawaga 1y ago
  they also never required many of their users to pay. whatsapp allegedly cost $1 a year, and I never paid a dime despite using it for years.
RestlessMind 1y ago
They never charged everyone. I was on Android back then and never paid a dime. Neither did anyone I know who was using Whatsapp on Android
- xeromal 1y ago
  They did charge me and I gladly paid.
- lomase 1y ago
  It was free on Android but paid on IOS.

BiggerChungus 1y ago

Respectfully, clearly you aren't familiar with Jan and Brian's history of public statements. Even for years after they were acquired by Meta, Jan refused to allow advertising and kept pushing the $1 dollar per user subscription fee. Sheryl nixed it b/c it was "not scalable." VC's may have the mindset that the founders will eventually acquiesce to ads, but also they didn't really care b/c all they wanted was an exit, which they got. The founders, however, were never interested in an ad business and hold that POV to this day.

robertlagrant 1y ago
> The founders, however, were never interested in an ad business and hold that POV to this day. Fair enough, but the founders don't necessarily make these decisions. I wasn't particularly referring to them. If they got VC money (I don't know if they did or not) then the VCs must've had something in mind to get a decent return on their risk.
- otterley 1y ago
  They did have VC funding from Sequoia Capital. (https://www.crunchbase.com/organization/whatsapp/financial_details https://www.crunchbase.com/organization/whatsapp/financial_d...)
eviks 1y ago
> VC's may have the mindset that the founders will eventually acquiesce to ads > history of public statements. Actions speak louder. He did acquiesce - he sold to an ad-financed company. > and hold that POV to this day. You can hold any POV when nothing depends on it.
udev4096 1y ago
Brian Acton is a fucking sell out. Peroid. He deserves no sympathy and I cannot believe how he was appointed executive chairperson of signal foundation

dakial1 1y ago

https://techcrunch.com/2014/02/19/whatsapp-will-monetize-later/ https://techcrunch.com/2014/02/19/whatsapp-will-monetize-lat... Zuck Says Ads Aren’t The Way To Monetize Messaging, WhatsApp Will Prioritize Growth Not Subscriptions "Monetization was the big topic on today’s analyst call after Facebook announced it acquired WhatsApp for a jaw-dropping total of $19 billion. That’s $4 billion in cash and $12 billion in stock, and it reserved $3 billion in restricted stock units to retain the startup’s employees. But Facebook CEO Mark Zuckerberg, CFO David Ebersman, and WhatsApp CEO Jan Koum all said that won’t be a priority for the next few years. And when the time does come to monetize aggressively, it won’t be through ads"

like_any_other 1y ago

It's called bait-and-switch - lure users in away from (possibly FOSS, e.g. Matrix) competitors, and when you have enough network effects that switching becomes hard, spring the trap.

udev4096 1y ago
People I know on matrix hardly ever use WhatsCrap or migrated to it. Most of them either stick to Signal or just matrix

rchaud 1y ago

Have you considered that you may be making the surface-level analysis? I paid $3 for Whatsapp in 2010 on the Blackberry app store. They had a staff of ~20 people handling messages across almost 200 countries.It became the defacto global messaging app because it was available on every single platform, not just the Apple/Google duopoly VCs cared about.

hn_throwaway_99 1y ago
Sorry, but the original commenter is correct. They received relatively small amounts of seed funding in 2009 and later charged a nominal amount to cover text verification, but they still were a classic VC-funded play: receive tens of millions in VC dollars to operate at a loss for years to build market dominance. From the Wikipedia page: > In April 2011, Sequoia Capital invested about $8 million for more than 15% of the company, after months of negotiation by Sequoia partner Jim Goetz.[63][64][65] > By February 2013, WhatsApp had about 200 million active users and 50 staff members. Sequoia invested another $50 million, and WhatsApp was valued at $1.5 billion.[26] Some time in 2013[66] WhatsApp acquired Santa Clara–based startup SkyMobius, the developers of Vtok,[67] a video and voice calling app.[68] > In a December 2013 blog post, WhatsApp claimed that 400 million active users used the service each month.[69] The year 2013 ended with $148 million in expenses, of which $138 million in losses. I mean, when Facebook bought WhatsApp for billions, what did people expect? How else were they going to monetize?
lou1306 1y ago
They also ran on Symbian and Windows Phone. I know because I used both ports.
mtlynch 1y ago
>I paid $3 for Whatsapp in 2010 on the Blackberry app store. A $3 one-time payment (which I'm guessing is about $2.75 after BlackBerry app store fees) is not sustainable for lifetime access and updates on a service that needs 4-5 nines of service availability and data integrity.