Latest news with #Koum
Times
21 hours ago
- Business
- Times
WhatsApp will start featuring ads. Here's what it means for you
'These days companies know literally everything about you, your friends, your interests, and they use it all to sell ads … Remember, when advertising is involved, you, the user, are the product.' These words were published in 2012, under the headline 'Why we don't sell ads'. The company that put its name to them? WhatsApp, the instant-messaging app that was then run by co-founders Jan Koum and Brian Acton, and charged users an annual fee of 99 cents. Two years later, they sold their business to Mark Zuckerberg's ad-funded social media behemoth, Meta, which already owned Facebook and Instagram. And for the past decade, the question has been 'when' not 'if' WhatsApp would reverse its founding principle. Last week, as leaders from the tech and media world gathered on the south coast of France for the annual Cannes Lions advertising festival, Zuckerberg's team made its move.
Business Times
3 days ago
- Business
- Business Times
WhatsApp's ‘no ads' promise meets Meta's reality
IT'S hard to think of a more extraordinary business deal than Facebook's US$19 billion acquisition of WhatsApp in February 2014. Its creators were outliers. With a lean staff of just a few dozen people, they had no marketing department, no sign on the door, and had spent zero cents from their sole investor, Sequoia Capital. But WhatsApp had 450 million users, mostly outside the US. Founders Jan Koum and Brian Acton also hated ads. They had spent a combined 20 years working at Yahoo!, bonding over their frustration with a business model that sucked up personal data to show us pop-ups. Building ad systems was 'depressing', Koum told me in an interview in mid-2014. But not too depressing to sell their chat service to online ad magnate Mark Zuckerberg, chief executive officer of Meta Platforms, just a few months later. Eight of WhatsApp's roughly 50 employees made more than US$100 million off that deal, while Koum gained a net worth of US$6.8 billion. This week, just over a decade later, ads are finally coming to WhatsApp. They'll appear in its Updates (formerly Status) tab, where users post images and videos. Advertisers will also be able to promote Channels there and collect thousands of followers. Meta described the rollout as 'gradual', suggesting WhatsApp users will start to see ads over the coming weeks and months. Zuckerberg has long been under pressure to monetise WhatsApp, a prominent cash sink whose user base has soared to more than three billion but which has yet to pay its own way. Now, with Meta's costly push into artificial intelligence, including a US$14.3 billion investment in data labelling startup Scale AI, the company is moving on the last big piece of real estate it can squeeze cash from. (Meta had already begun monetising WhatsApp through business messaging tools and click-to-WhatsApp ads on Facebook and Instagram, but this is the first time ads are appearing inside WhatsApp itself.) Ads fly in the face of what WhatsApp's founders wanted. For a few years after his extraordinary sale, Koum resisted efforts inside Facebook to feature ads on WhatsApp, his co-founder Acton later told me, while Acton himself tried to convince Sheryl Sandberg, then the company's chief operating officer, to introduce a metered-user model. His idea was to charge users a tiny amount, perhaps a tenth of a cent, after a certain large number of free messages were expended and monetise WhatsApp that way. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Sandberg stuck by the ad model that already allowed Facebook to print money for years, telling Acton that his idea wouldn't scale. By the time he left the company, Acton knew that he couldn't stop the inevitable. 'At the end of the day, I sold my company,' he said. Still, both internal and public resistance to ads has been enough to make Meta's monetisation plans for WhatsApp a fitful journey over the last decade. Meta's chief marketing officer, Alex Schultz, admitted on LinkedIn that the company had announced ads a few times already. 'This time it's for real,' he added. Meta first publicly announced its intention to bring ads to WhatsApp Status back in November 2018, then put the plans on hold and nixed them in 2020, before announcing in 2023 that the rollout was back on. The U-turns are down to the staunch views of WhatsApp's founders, who infused company culture even after they vested their stock options and left Meta. WhatsApp users are also accustomed to a clean, ad-free app that keeps their conversations private with end-to-end encryption. When the company tweaked its privacy terms in 2021 to add more business-messaging features, many ditched it for rival apps like Signal and Telegram. Meta had to move slowly. Now it's trying to make up for lost time. It will target ads based on users' country or city, channels they follow and how they interact with ads they see on Status or on sister apps Facebook and Instagram if their accounts are linked. That's less invasive than the targeting done on Facebook or Instagram, but it's still a form of clutter that WhatsApp's founders abhorred. And Zuckerberg could still push for deeper insights as revenue from Status starts to pour in. According to Schultz, 1.5 billion users visit the feature every day. Meta's investors can rest easy knowing the company has yet another platform to capitalise on as Zuckerberg spends heavily on AI. The rest of us have yet another reminder that tech's most important visionaries can sometimes be as naive as they are idealistic. Sam Altman's efforts to start OpenAI as a nonprofit that lived off donations from benevolent billionaires was arguably a pipe dream, hence his eventual partnership with Microsoft. DeepMind's Demis Hassabis spent years trying to break away from Alphabet's Google, believing the search giant would be willing to spin off a valuable AI lab after spending US$650 million on it. In the end, he was wrong and his company was drawn deeper into Google. Koum and Acton were similarly guileless to think they could sell WhatsApp to one of the world's biggest advertising businesses and avoid ads. Of course, US$19 billion can make even the purest ideals go quiet. In the end, money talks. BLOOMBERG
Miami Herald
5 days ago
- Business
- Miami Herald
Veteran portfolio manager raises eyebrows with latest Meta Platforms move
On Feb. 19, 2014, big things were happening, both in the sky and on the ground. Overheard, a minor geomagnetic storm was already in progress when a coronal mass ejection, or CME, struck Earth's magnetic field. Don't miss the move: Subscribe to TheStreet's free daily newsletter Meanwhile, back on Earth, Facebook said it was making its biggest acquisition of all time. The social-media giant, which changed its name to Meta Platforms (META) seven years later, was buying WhatsApp, the cross-platform messaging and calling app, for $19 billion. The deal was more than 20 times larger than Facebook's 2012 purchase of Instagram, and at the time it was the largest acquisition of a venture-capital-backed company in history. "WhatsApp is on a path to connect 1 billion people," said Mark Zuckerberg, Facebook's founder and CEO. "The services that reach that milestone are all incredibly valuable." WhatsApp had been founded in February 2009 by two former Yahoo employees, Brian Acton and Jan Koum. When early versions of WhatsApp kept crashing, Koum considered giving up and looking for a new job, Acton encouraged him to wait a "few more months."Good idea because by 2015 WhatsApp would become the world's most popular messaging application. By February 2020 it had more than 2 billion users worldwide and by 2023 WhatsApp Business had roughly 200 million monthly users. Both Acton and Koum, whose motto had been "No ads, no games, no gimmicks," left the company seven years ago. More Tech Stocks: Palantir gets great news from the PentagonAnalyst has blunt words on Trump's iPhone tariff plansOpenAI teams up with legendary Apple exec And what's up with WhatsApp now? Well, on June 16 Meta said businesses would now be able to run status ads on WhatsApp that prompt users to interact with the advertisers via the app's messaging features. The ads will be shown only to users within WhatsApp's Updates tab, to separate the promotions from people's personal conversations. Businesses with channels will be able to choose to promote ads in the Updates section to attract new followers, and also charge a subscription to access extra content. WhatsApp will eventually take a 10% commission of that fee, the BBC reported, and there may also be extra costs on top of that taken at the app store level depending on the size of the business. "We've been talking for years about how to build a business on WhatsApp in a way that doesn't interrupt personal chats, and we believe the Updates tab is the right place to introduce that," Meta said in a statement. Meta will begin monetizing WhatsApp's Channels feature through search ads and subscriptions. "Like everything else on WhatsApp, we've built these features in the most privacy-oriented way possible," the company said. "Your personal messages, calls and statuses remain end-to-end encrypted, meaning no one can see or hear them. That includes Meta." Meta is currently locked in a legal battle with the Federal Trade Commission, which alleges that the company's acquisitions of Instagram and WhatsApp were part of a strategy to eliminate competition and maintain a monopoly in the social media market. TheStreet Pro's Chris Versace sees a pattern in Meta's latest move with WhatsApp. "We know that when the company changed its name from Facebook to Meta, [we] were going to see the management team lean into other businesses, whether it was Instagram or some of the things that it's doing in the wearables, whether it's Oculus or the Ray-Ban glasses," the lead manager for TheStreet Pro Portfolio said. Related: Meta (Facebook) shocks retail world with unexpected news "Now, we're seeing that CEO Mark Zuckerberg plans to integrate online ads into WhatsApp," he noted. Versace said this was a very strong move for the social media giant, pointing to the company's effort to monetize Instagram. "According to Statista, WhatsApp had over 3 billion monthly active users in March," Versace said. "So if this is successful, and there's reason to think that it will be, it will be another growth driver for the company and its bottom line, and a positive catalyst for the shares. As we see signs of this happening, we will look to revisit our Meta price target." Versace's current price target on META is $725. Opinions about the WhatsApp plan varied on social media. Great to see them finally rolling out ads," one poster said on X. "Whatsapp is one of the greatest products ever. It isn't free to run it. Ads continue to be the greatest leveler to ever exist for billions of people High income people in rich countries will get on high horse about ads but who cares." "Sorry buddy, this is textbook enshitification," one person responded. Shares of Meta Platforms finished regular trading June 16 up 2.9% at $702. The stock has climbed about 40% from last year and is up almost 20% in 2025. On June 16 Oppenheimer boosted its price target on Meta Platforms to $775 from $665 and affirmed an outperform rating on the shares. With the macroeconomic and advertising environment better than feared vs. six weeks ago, the investment firm is increasing its earnings estimates and price target. A "TikTok Q1 tailwind is potential near-term risk, assuming no ban, while longer-term risk is Meta falling behind on AI model development," Oppenheimer added, quoted by TheFly. Related: Fund-management veteran skips emotion in investment strategy The Arena Media Brands, LLC THESTREET is a registered trademark of TheStreet, Inc.
The Independent
6 days ago
- Business
- The Independent
WhatsApp to start showing ads to users in some parts of the messaging app
WhatsApp said Monday that users will start seeing ads in some parts of the app, as owner Meta Platforms moves to cultivate a new revenue stream by tapping the billions of people that use the messaging service. Advertisements will be shown only in the app's Updates tab, which is used by as many as 1.5 billion people each day. However, they won't appear where personal chats are located, developers said. 'The personal messaging experience on WhatsApp isn't changing, and personal messages, calls and statuses are end-to-end encrypted and cannot be used to show ads,' WhatsApp said in a blog post. It's a big change for the company, whose founders Jan Koum and Brian Acton vowed to keep the platform free of ads when they created it in 2009. Facebook purchased WhatsApp in 2014 and the pair left a few years later. Parent company Meta has long been trying to generate revenue from WhatsApp. WhatsApp said ads will be targeted to users based on information like the user's age, the country or city where they're located, the language they're using, the channels they're following in the app, and how they're interacting with the ads they see. WhatsApp said it won't use personal messages, calls and groups that a user is a member of to target ads to the user. It's one of three advertising features that WhatsApp unveiled on Monday as it tries to monetize the app's user base. Channels will also be able to charge users a monthly fee for subscriptions so they can get exclusive updates. And business owners will be able to pay to promote their channel's visibility to new users.
Indian Express
6 days ago
- Business
- Indian Express
WhatsApp announces its first advertising play, but won't show it to everyone
It is finally happening. WhatsApp is finally opening up for advertising, though limited to the Status tab. The move is significant because the messaging platform with over 1.5 billion daily users has since the time of its launch, and even after its acquisition by Facebook, maintained that advertising is something it was not very keen on. In a set of new features announced today, WhatsApp has started rolling out ads in Status, allowing users to find new businesses while browsing through the tab. Alice Newton-Rex, VP product at WhatsApp, said they are also starting channel subscriptions to 'allow users to support their favourite channel by subscribing to receive exclusive updates for a monthly fee' and promoted channels with boosted visibility in the directory. WhatsApp has over the years had a strong stance against advertising, with founder CEO Jan Koum highlighting how the company did not want to become 'just another ad clearinghouse'. In fact, he was famously quoted as saying that 'when advertising is involved, you, the user, are the product'. In 2014, when Facebook picked up WhatsApp for $19 billion, both Mark Zuckerberg and Koum stuck to their no-ads vision for the messaging platform, with the Facebook CEO even saying he did not think 'ads are the right way to monetise messaging'. The new feature actually stays true to this commitment as users who don't use Status update will not see any ads. In fact, in 2017, Koum's co-founder Brian Acton had told The Indian Express (WhatsApp co-founder Brian Acton: 'Social is not in our vocabulary') that the platform had started 'creating the foundations of how businesses will engage with consumers', calling it 'clean, straightforward, simple and spam-free communication'. This need for private, personal conversations is and will always be the heart of WhatsApp, Newton-Rex said in a select media briefing. 'Privacy is at the core of everything we do, and it's what continues to drive us as we innovate and look to the future. But we know that if we get the core of private messaging right, then this gives us the opportunity to build more that users want.' She said this was one of the reasons why WhatsApp introduced the Updates tab, 'as a place for optional experiences,' different from chats inbox. She said they are already seeing 'a lot of admins and businesses use channels and status in creative ways' and this is why WhatsApp wanted to 'give them more tools to help them grow'. Newton-Rex said WhatsApp 'has been talking about plans to build a business that does not interrupt your personal chats for years, and we believe that the Updates tab is the right place for these new features to work'. With ads in status, she said, people will be able to find a new business and easily start a Whatsapp chat with them about a product or service. 'And for the businesses who rely on WhatsApp, this will help them attract new customers.' In response to a query, Newton-Rex told that users 'will be able to take out the ads in the ads manager, just like you do for Facebook or Instagram ads. Now WhatsApp will also be an option'. The ads will come in the middle of status updates, and users who have a lot of these to catch up will potentially see more ads compared to a user who has fewer status updates from contacts. The ads will also be guided by the same principles as other Meta campaigns and will be reviewed before being made live. Clarifying that this was a feature businesses have been asking for, the WhatsApp product head said: 'There are hundreds of millions of businesses on WhatsApp talking to their customers, and we think that the reason that business has already been so successful is that people just find this a better way to interact with them. So it felt like the next logical step to help them also discover businesses directly within WhatsApp.' Asked if these WhatsApp ads would be targeted differently, given that the platform was more community driven and not open like rest of the web, Newton-Rex underlined that WhatsApp has a 'limited set of information' and the kinds of signals that will be used are country or city, what channels you follow, what languages you use, and what ads you have interacted with. This, she said, could lead to a lot of local ads too. With promoted channels, admins will get the ability to promote certain channels in the channels directory to help attract new followers and increase distribution for their content. Channel subscriptions, meanwhile, will give them a new way to share exclusive in the moment updates with their most engaged followers, while earning money right on WhatsApp. Meanwhile, subscription channels will be available only to select channel partners in the beginning and broadened to more later with the ability to charge a fixed fee through the app stores. Initially, WhatsApp will not charge a fee for this feature. Nandagopal Rajan writes on technology, gadgets and everything related. He has worked with the India Today Group and Hindustan Times. He is an alumnus of Calicut University and Indian Institute of Mass Communication, Dhenkanal. ... Read More
