CREDIT: AP – Patrick Sison
Facebook inked a deal Wednesday to buy mobile messaging company WhatsApp for a cool $19 billion — about 8 percent of Facebook’s total worth. The deal gives Facebook access to the messaging app’s vast international user base. But WhatsApp users may wonder how the company’s approach to user privacy and data collection will shift after acquisition by a social network whose core mission is to “make the world more open and transparent.”
WhatsApp is a SMS messaging mobile app founded in 2009 that allows users to text anyone they want practically for free. While WhatsApp isn’t as popular in the United States, it has strong followings overseas in Europe, India, Latin America and Africa — places where Facebook is looking to expand.
With nearly half a billion unique users and 310 million daily users of the app, WhatsApp was poised to topple Facebook and Twitter as the most popular social media network. Twitter has about 240 million users while Facebook’s total users came in just shy of that — around 300 million — at the end of 2013.
WhatsApp prides itself on limiting data collection from its users. Both of WhatsApp’s founders, Jan Koum and Brian Acton worked for Yahoo and saw how tech companies exploited users’ online activity to make better ads. “These days companies know literally everything about you, your friends, your interests, and they use it all to sell ads,” the founders wrote on WhatsApp’s blog. “When we sat down to start our own thing together three years ago we wanted to make something that wasn’t just another ad clearinghouse.”
Koum, who grew up in communist Ukraine, is a staunch privacy supporter because of his upbringing. “Jan’s childhood made him appreciate communication that was not bugged or taped,” Jim Goetz, a partner with Sequoia Capital, a WhatsApp investor, told the Wall Street Journal.
The app was built on the premise that people can share messages, photos and videos without interference from third parties. Those messages are deleted off WhatsApp’s servers once they’re delivered.
While WhatsApp prides itself on its privacy values, Facebook is known for voraciously collecting personal data from its users and then selling it for advertising or to create more integrated services, such as a feature that inserts users photos into ads. Given Facebook’s extensive history at the center of privacy controversies and lawsuits worldwide, buying WhatsApp, which collects and stores little to no data from their users and is ad-free, begs the question: what happens to WhatsApp under Facebook’s control?
The answer, for now, is nothing. Facebook wants to help WhatsApp grow, holding off on monetizing the app with ads for the time being, Facebook founder Mark Zuckerberg said in a conference call Wednesday. As it is now, Facebook said it won’t intervene with daily operations, and the messaging app will remain autonomous.
But Facebook has a tendency to acquire and transform potential competitors that touted their protections of user data. For example, when Facebook bought Instagram (and its 30 million users) in 2012 for $1 billion, Facebook said it simply wanted to grow the service, like it plans to do with WhatsApp. In Instagram’s early years, users owned their content on the photo-sharing app and didn’t see ads. A year after Facebook took over, Instagram changed its privacy policies, giving its new parent company more access to user data. The move, which allowed users Instagram photos to be sold and used in ads, incited a backlash and many users threatened to abandon the service. Months later, Instagram began featuring ads at the tail end of 2013.
If Instagram’s privacy evolution is any indication, WhatsApp, which may soon hit a billion users, will likely follow suit.