As soon as the ink dried on Facebook’s acquisition of messaging application WhatsApp, industry leaders questioned whether the social network overpaid with its $19 billion buy. So why did Facebook do it? WhatsApp Co-Founder Brian Acton discussed how the company can help Facebook in the future at an event in Palo Alto, Calif., Wednesday night, hosted by Stanford University-spawned startup incubator StartX.
Acton made a bold statement about how WhatsApp will eventually drive revenue for Facebook:
I think the goal here is that WhatsApp will bring Facebook another billion users. Whether there’s a direct valuation or an indirect valuation, there’s value. I think Facebook understood that and understands it very well. That’s going to be a billion users of high engagement. We’re a pretty high-engagement product. I think there are longer-term questions as to how we generate revenue and how we generate value on the bottom line at Facebook, but the point there is that Facebook is willing to invest. They’re willing to put forth the dollars and say, “Hey, we’re going to invest in you guys. Not only are we going to buy you guys, but we’re going to invest in you guys.”
But just because WhatsApp is (soon to be) part of Facebook does not mean that the company will take the social network’s stance on data privacy.
Acton said that WhatsApp doesn’t ask for more than a cell-phone number and doesn’t ask for demographic information such as age. He noted that the messaging app doesn’t track messages, simply because it doesn’t have the bandwidth or manpower to do so. While the resources available will definitely change under Facebook, Acton promised attendees that WhatsApp’s stance on data privacy will not waver.
Acton told reporters (as well as the couple of hundred startup founders and Stanford students in attendance) that the only thing WhatsApp is focused on right now is delivering a great product and building to scale:
We take user privacy and message content very seriously. We do our best to avoid sharing information unless we believe it’s required and sanctioned.
Although WhatsApp will become part of Facebook once the deal is finalized, Acton said Facebook Co-Founder and CEO Mark Zuckerberg agreed to leave the product of WhatsApp alone and help it continue to grow. The main goal is for WhatsApp to keep growing internationally and eventually bring new users in underserved countries onto the Facebook platform — something that fits with the overall mission of Internet.org.
Acton said that it has been difficult explaining the product to U.S. users, but it is wildly popular in Europe, as it counteracts SMS fees when a user texts a friend in another country.
WhatsApp will not fold into Facebook Messenger (or the reverse), Acton said, noting that Facebook is committed to keeping the products separate. They may borrow features from each other in the future, but there won’t be any cannibalization, Acton claimed. He talked about how WhatsApp will work together with Facebook, and how he’s not worried about being “swallowed by the borg,” as he put it:
One of the best aspects of this is that (WhatsApp Co-Founder Jan Koum) and Mark agreed to a model of independence in how Facebook will own and operate WhatsApp. We’ve said this publicly and we’ve written it in our blog — it’s business as usual for us. It’s not like we’re going to on day one start sending all this data to Facebook.
Acton, who previously worked for Apple and Yahoo (along with Koum), also discussed how Stanford helped him get where he is today and marveled at the startup culture in Silicon Valley. When he graduated from Stanford 20 years ago, Acton said maybe a couple of his classmates launched their own companies, preferring to take jobs with more established organizations. Now, students and grads are taking the risk and innovating like never before.
Acton spent more than 10 years at Yahoo, then took a break for a year, before finally teaming up with Koum to build out WhatsApp. The company has traditionally avoided media coverage, as Acton said that would have taken attention away from development.
He also applied to work for Facebook (and Twitter), but wasn’t a fit for either company. He wasn’t mad about it, though. Acton talked about how the rejection from Facebook was a positive note and how the acquisition brought everything full-circle:
It’s crazy. By the end of it, you’re just numb, and you’re trying to grasp it all. I don’t think I’ve grasped it all just yet. It hit me in stages … I met some great people at Facebook in the summer of 2009. Fundamentally, I was not in the right mindset to join Facebook at that time … I interviewed on good terms with Facebook, and I’m not bitter about being turned down. That’s why my tweet was so positively worded. In my interactions with Mark and others, they get it in the same way we get it. We might disagree about some topics, but they really understand what communication products are like.
Readers: Do you think WhatsApp will continue to be operated as usual?
Image courtesy of StartX.