WhatsApp has vowed never to sell ads. It collects no information about users beyond their phone numbers. So you’re right to wonder why it was just acquired by the world’s second-largest mobile advertising company.
“From the day we started the company, we always felt that doing advertising in our product would be a very wrong thing to do,” Jan Koum, co-founder and chief executive of WhatsApp, said earlier this year. “There are companies that are built around advertising. There are great technology companies in Silicon Valley that monetize by advertising to their users. We just felt that we wanted to take a different route.”
The apparent contradiction between WhatsApp and Facebook, which will pay $19 billion for the messaging app, actually explains a lot about the current state of the mobile internet. Most of all, the deal emphasizes that these are early days in the transition from personal computers to mobile phones. For a company like Facebook, which only recently entered the latter era, it’s useful to bet on multiple outcomes.
“I don’t personally think that ads are the right way to monetize messaging systems,” Facebook CEO Mark Zuckerberg said today on a conference call about the acquisition.
Facebook certainly does a tidy business selling ads to display in its apps for iPhones, iPads, and Android devices. Still, the company faces tough challenges as it tries to grow from here. Mobile ads are still less valuable than the ones seen by Facebook users on their PCs. And simple geometry dictates that mobile devices have less space for advertising than the expansive desktop web.
But there’s something else, more fundamental: a disquieting suspicion that, in the long run, advertising simply might not work for the mobile web.
“No one wakes up excited to see more advertising, no one goes to sleep thinking about the ads they’ll see tomorrow,” Koum wrote in 2012. It echoed a prophesy that writer Doc Searls made about the web all the way back in 1998: “There is no demand for messages.”
Of course, Searls wasn’t talking about the kind of person-to-person messages that WhatsApp specializes in. Rather, he was pushing the idea that the internet would lead to the erosion of mass media where messages—think corporate marketing or political messaging—could be imposed on people no matter what. That happened to an extent, but most of the web’s big businesses—Facebook chief among them—can fairly be described as mass media. At any rate, they have been successful selling ads.
What if things are different—and much closer to Searls’s vision—on the mobile internet? Koum certainly thinks so: “Cellphones are so personal and private to you that putting an advertisement there is not a good experience,” he said last year. He has described mobile messaging as a utility akin to water or gas.
Or perhaps, well, a phone company. After all, WhatsApp transmits 18 billion messages a day, but doesn’t send any itself.