Facebook’s New Message to WhatsApp: Make Money • Hacker News Board

Re: Facebook’s New Message to WhatsApp: Make Money

#101

Post by sonnyblarney » Wed, Aug 01, 2018, 8:28 PM UTC

xkjkls wrote: post #79

dlojudice wrote: post #48

Is monetizing through ads the only way to go? Is FB org trapped on its modus operandis (innovator's dilemma)? What about payments (charging a small fee for transactions) on their platform? The number of people already making business transactions on WhatsApp platform is huge, specially in Brazil [1]. A big bank in Brazil has already tried to grab this market by creating a keyboard with wire transfer integration [2].…

Square, a company with many years headstart, trades at a high multiple, and has many more integration points into commerce than WhatsApp does currently, trades at a market cap of $27 billion. Given that Facebook bought WhatsApp for $19 billion, trying a low probability strategy of trying to compete for market share where the best case scenario is $27 billion in value seems foolish.

Square and Whatsapp are basically not comparable business entities.

Re: Facebook’s New Message to WhatsApp: Make Money

#102

Post by Marsymars » Wed, Aug 01, 2018, 8:29 PM UTC

RestlessMind wrote: post #77

anuragbiyani wrote: post #66

Earlier quoted context omitted.

You are completely mistaken if you think adding a subscription-only would not reduce usage of WhatsApp by 10x at least. I am an Indian (WhatsApp's biggest market by far), and know for a fact that hardly 1% of people using it right now in India would be able/willing to set up a payment system AND willing to pay $1 for it (which is not as inexpensive as you think) when there are so many free alternatives. And then it i…

But those who can afford to pay (either for WhatsApp or for YT Premium) are typically the ones most lucrative for the advertisers. So if I am in charge of such products, what is the incentive for me to invest into these efforts which are only going to add complexity while not making any extra money? What is the compelling reason for offering an Ad-free mode if it is going to be adopted by a tiny fraction?

Because as someone who's willing to pay to not have ads, ads are a non-starter for me. If they're forced upon me, I'll switch products, and force anyone I communicate with to switch products to continue communicating with me. (If an individual won't install Signal, I'll drop down to SMS/email for them.)

Re: Facebook’s New Message to WhatsApp: Make Money

#103

Post by iraphael » Wed, Aug 01, 2018, 8:30 PM UTC

xkjkls wrote: post #87

russellbeattie wrote: post #78

Whatsapp had a great business model: $1 a year. With their current 1.5 billion users, that's nothing to sneeze at. It doesn't cost them $100M a month to provide the service. I wish more companies were like Craigslist - happy to make an great profit and a lasting business by providing basic information services for a reasonable price. Instead, a bunch of MBAs want to rule the world by focusing on growth at all costs,…

How many of their current users would actually be paying $1 a year? Over the long term how many more? Most of these products want to be free. If I'm paying $1 a year to WhatsApp and see my friend using a different app without being charged for it, I feel like I'm getting screwed. I find it hard to think of WhatsApp truly being a long term product with that business model. Two, claiming encouraging more ads on your pl…

The power of mass usage comes into play here. IIRC, when WhatsApp launched, I was one of the early adopters. As it grew (and it became hugely popular in Brazil, where I lived) they switched to the $1/year model. Current users were auto-enrolled in a "free-for-life" plan. My friends who didn't have WhatApp would still sign up because everyone else was using it and, besides "$1/year? it's almost nothing".

Re: Facebook’s New Message to WhatsApp: Make Money

#104

Post by pmlnr » Wed, Aug 01, 2018, 8:31 PM UTC

wlesieutre wrote: post #86

russellbeattie wrote: post #78

Whatsapp had a great business model: $1 a year. With their current 1.5 billion users, that's nothing to sneeze at. It doesn't cost them $100M a month to provide the service. I wish more companies were like Craigslist - happy to make an great profit and a lasting business by providing basic information services for a reasonable price. Instead, a bunch of MBAs want to rule the world by focusing on growth at all costs,…

Glossing over the fact that they probably wouldn't have all of those 1.5 billion users if it had stayed a paid service. Even at $1, having to pay money pushes people off to other free platforms.

So? It would still be profitable. Not everyone has to use the same thing.

Re: Facebook’s New Message to WhatsApp: Make Money

#105

Post by walterbell » Wed, Aug 01, 2018, 8:32 PM UTC

From https://mobile.nytimes.com/2018/04/30/technology/whatsapp-fa...

"Mr. Koum had grown increasingly concerned about Facebook’s position on user data in recent years. Mr. Koum was perturbed by the amount of information that Facebook collected on people and had wanted stronger protections for that data ... he felt the company’s board simply paid lip service to privacy and security concerns he raised ... Mr. Koum was tired from fighting back against pressure from the board throughout 2017 to allow advertisements on WhatsApp ... There had been a certain level of pride within WhatsApp’s team over the dedication to privacy and the departure of their co-founder had left many wondering whether Facebook would now open WhatsApp to tracking user data and, eventually, to ads on its service."

https://www.google.com/amp/s/www.cnet.com/google-amp/news/wh...

"WhatsApp founders Jan Koum and Brian Acton reportedly left $1.3 billion behind by leaving Facebook ... The major divide was over monetizing the messaging app, which has 1.5 billion users. Koum and Acton had been resistant to adopting Facebook's widely lucrative targeted advertising model."

Re: Facebook’s New Message to WhatsApp: Make Money

#106

Post by bad_user » Wed, Aug 01, 2018, 8:33 PM UTC

xkjkls wrote: post #87

russellbeattie wrote: post #78

Whatsapp had a great business model: $1 a year. With their current 1.5 billion users, that's nothing to sneeze at. It doesn't cost them $100M a month to provide the service. I wish more companies were like Craigslist - happy to make an great profit and a lasting business by providing basic information services for a reasonable price. Instead, a bunch of MBAs want to rule the world by focusing on growth at all costs,…

How many of their current users would actually be paying $1 a year? Over the long term how many more? Most of these products want to be free. If I'm paying $1 a year to WhatsApp and see my friend using a different app without being charged for it, I feel like I'm getting screwed. I find it hard to think of WhatsApp truly being a long term product with that business model. Two, claiming encouraging more ads on your pl…

Just before WhatsApp was bought by Facebook, they were asking for that $1 per year (I remember paying it) and they had 450 million users, in spite of plenty of chat alternatives being on the market ever since the 90s.

I initially ignored it then switched to it after they started to do end to end encryption and encouraged all my friends to use it, instead of Facebook’s Messenger.

So yes, they were already popular because the app was working on all platforms, because it is easy to connect with your friends and because it did what it was supposed to do without the crap.

I’m not saying that the ads model doesn’t have its place, far from it, I’m saying that WhatsApp could have lived just fine without it.

Re: Facebook’s New Message to WhatsApp: Make Money

#107

Post by drdaeman » Wed, Aug 01, 2018, 8:33 PM UTC

goodrubyist wrote: post #99

anuragbiyani wrote: post #66

Earlier quoted context omitted.

You are completely mistaken if you think adding a subscription-only would not reduce usage of WhatsApp by 10x at least. I am an Indian (WhatsApp's biggest market by far), and know for a fact that hardly 1% of people using it right now in India would be able/willing to set up a payment system AND willing to pay $1 for it (which is not as inexpensive as you think) when there are so many free alternatives. And then it i…

I don't know how you can seriously argue that $1/year is "not as inexpensive as you think." Even in poor countries, that subscription fee is ridiculously low.

There are a lot of cheapskates who believe anything over $0.00/forever is too much. I don't really know how many there are, but in some places (anecdotally and quite subjectively, especially poorer areas) there are people that just object to paying anything if there's a way to get something remotely similar for free. Even if that way ends up costing more in wasted time or sacrificed privacy or self-respect.

Heck, I think I'd admit was like that, once upon a time. I stopped only when I started earning enough to be able to spend relatively liberally, sometimes even without looking at the exact price, as well recognized my time's worth something too.

Re: Facebook’s New Message to WhatsApp: Make Money

#108

Post by JumpCrisscross » Wed, Aug 01, 2018, 8:34 PM UTC

freyr wrote: post #100

eitally wrote: post #19

Earlier quoted context omitted.

Yeah ... but a huge fraction of Whatsapp users (in India & Africa especially) use $100 (or less) phones....

It surprises me that ad companies build their businesses around audiences who cannot afford $1/year for a useful service. I'm not suggested that people in poorer economies should be deprived of targeted advertising. It's just surprising they wield such influence. I guess they make it up in volume.

> audiences who cannot afford $1/year for a useful service

Not being able to afford and not being willing to pay are separate.

Re: Facebook’s New Message to WhatsApp: Make Money

#109

Post by freyr » Wed, Aug 01, 2018, 8:34 PM UTC

jankey wrote: post #81

xkjkls wrote: post #70

Earlier quoted context omitted.

Because they paid $19 billion for it and need some form of return on that investment? You can't just throw stockholder's equity around like that and then come up with a plan that maxes out at ~$1 billion a year in revenue.

Well, they could, as Zuck has ~ 60% of voting rights.

Zuck paid $19 billion for it and needs some form of return on that investment? You can't just lose $16,000,000,000 in personal wealth in a day and come up with a plan that maxes out at ~$1 billion a year in revenue.

Re: Facebook’s New Message to WhatsApp: Make Money

#110

Post by egypturnash » Wed, Aug 01, 2018, 8:36 PM UTC

xkjkls wrote: post #91

TillE wrote: post #89

Earlier quoted context omitted.

Apple and third-parties have obviously seen value in selling those stickers and crap. I think there actually would be a decent market for premium emoji. It's not too difficult to imagine all sorts of fun bonus features in a chat app.

For whom is that the primary business model, instead of an addition though?

IRC, Line makes absolute pots of money off of stickers, merch of the characters they've made for those stickers, and assorted other things. Wish I could find the article I read on that a while back.