Facebook made history on Wednesday 19th February 2014 acquiring WhatsApp for $16 billion in what is seen as one of the most expensive tech acquisition to date. Facebook fronted $4 billion cash, 12 billion worth of stocks for the deal and a further 3b stocks over the next four years. It has been rumored Facebook may ruin the app and there still remains doubt on what exactly Facebook plans with its new acquisition.
The 16 billion dollar question thus far is whether Facebook will introduce ads on this popular app. It may have been already noted that unlike Facebook Whatsapp doesn’t make money through ads. The app founders Jan Kuom and Brian Acton have been firm in sticking to make the app free to use for the first year and charging a $0.99 subscription thereafter. In a statement made by Kuom prior to the deal suggests the founders will still have a bias for the no-ads policy.
“We think that for our product, advertising is not necessarily the right way to go,We think we have a very solid monetization system in place.” said Kuom.
But acquistion already in place the app founders now face a crisis: to introduce or not introduce the ads. Whatsapp users may not have to fear a ruin of their popular and much loved service after all as the Facebook founder Mark Zuckerberg has indicated there no plans whatsoever to change the app.”I don’t think ads are the right way to monetize, instead the focus will be on helping the service continue to scale up.” said Zuckerberg.
As for now, Whatsapp users can breath easy knowing their favorite app still remains what is: simple, lightweight, instant and enjoyable. But one could not quite be sure what’s on Zuckerberg’s mind, he could be thinking of ways to use the user data within Whatsapp, a thought that has come to many bloggers concluding that Zuckerberg didn’t want to let a rival have access to all the data on user activities within WhatsApp.
This data could be collected to serve as intelligence to serve more relevant ads based on more interests’ data collected off Facebook. The mere fact that WhatsApp doesn’t advertise within the app wouldn’t limit Zuck from adding widgets and services that will connect users to their Facebook profiles thus finding ways of linking the two up. Remember how Candy Crush works? Where users get nice things by sharing to Facebook? This could be another opportunity for the game meat eater.