Anyone know how this works? If everything that Facebook claims in that newspaper advertisement is true, then Facebook has
- paid $19 billion to buy whatsapp
- Removed whatsapp’s subscription model and given it away for free
- Has been paying the bills for the infrastructure and maintenance costs of a massively popular service
- Paid for a full page advertisement in newspapers with claims that whatsapp data will not be monetized like the other Facebook services
This makes zero sense to me. Everything about whatsapp looks like an expense to Facebook. Can someone more knowledgeable please help make sense of this situation?
This is called commoditization. Pretty much every company does this.
You offer a product that would normally be paid, for free and gain market share. Then you build a business on top of that customer base you created.
That's where WhatsApp comes in for Facebook. They've gained huge market share, now they can attract businesses that want to sell directly to consumers. This is pretty handy and common in countries like Brazil.
Before people start shouting against Facebook, I'll reiterate that every company does this:
- Microsoft did by driving PCs' prices down so they could gain software market share.
- Stripe does it, with things like Stripe Atlas. They commoditize creating your own business by making it very simple. The idea is that [some of] those new businesses will eventually use Stripe and will help the company grow.
Facebook has monetization plan for whatsapp in India. In partnership with Reliance Jio, they are launching an e-commerce on whatsapp! So all of these strategies including publishing ad in newspapers makes sense in that regard
The only rationalization I can imagine is that providing whatsapp potentially prevents the emergence of a competitor who steals users from Facebook through their chat service.
Facebook wants to get businesses to use whatsapp and that's where they will get value. Payments + services for businesses will subsidize the E2EE personal chat.
- paid $19 billion to buy whatsapp
- Removed whatsapp’s subscription model and given it away for free
- Has been paying the bills for the infrastructure and maintenance costs of a massively popular service
- Paid for a full page advertisement in newspapers with claims that whatsapp data will not be monetized like the other Facebook services
This makes zero sense to me. Everything about whatsapp looks like an expense to Facebook. Can someone more knowledgeable please help make sense of this situation?