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Facebook’s New Message to WhatsApp: Make Money

wsj.com

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

#111

Post by freyr »

JumpCrisscross wrote: post #108
freyr wrote: post #100

Earlier quoted context omitted.

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.

Not really, if the amount of disposable income is the deciding factor.

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

#112

Post by sushid »

pmlnr wrote: post #104
wlesieutre wrote: post #86

Earlier quoted context omitted.

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.

Sure but it will start to erode its market share as other companies offer similar but free products.

And a mobile messaging company relies on the network effect to stay relevant and popular.

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

#113

Post by bad_user »

Marsymars wrote: post #102
RestlessMind wrote: post #77

Earlier quoted context omitted.

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.)

In my experience, no, you can’t force alternatives on your friends and family, unless it’s an alternative they already have.

No, they won’t install Signal. If that were a real possibility, you would have done it already. So SMS it is. But I wonder, isn’t SMS more expensive than $1 / year? SMS has had outrageously high rates compared with 3G.

In some parts of the world that’s precisely the reason for WhatsApp’s popularity.

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

#114

Post by Ensorceled »

nell wrote: post #58

I wonder if that is why they opened up their API to Twilio. Twilio can now pay Whatsapp whatever it has to pay the carriers to send/receive SMS.

Given how little Twilio charges per messsage, this can not be a serious money maker for Whatsapp.

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

#115

Post by Smirnoff »

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,…

Ok, I agree that some MBAs can be full of it but can we already stop this MBA hate on HN? I feel like lots of people here think that if you build something then customers will surely come. I've got a huge surprise for you. You will have to sell your product and some of the MBA's are really great at that. In B2B a single sale can make or break your company when you're low on cash.

You do your job and let them do theirs. You code, talk to users, ship, and iterate. They handle sales, operations, marketing, and maybe fundraising. These other things can be done by a technical founder but they are not fun. There is a reason why some companies hire COOs so that CEOs can focus on their job.

Finally, it's not MBAs who decided to focus on growth at all costs. It's the nature of the game. Either you get to the top or your competitors will do that. So don't hate the player, hate the game.

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

#116

Post by JumpCrisscross »

freyr wrote: post #111
JumpCrisscross wrote: post #108

Earlier quoted context omitted.

> audiences who cannot afford $1/year for a useful service Not being able to afford and not being willing to pay are separate.

Not really, if the amount of disposable income is the deciding factor.

> if the amount of disposable income is the deciding factor

That's a big if, though. I wouldn't pay $1/year for WhatsApp messaging as a consumer. But I have a lot of disposable income. When you have a free substitute, these signals get mixed up.

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

#117

Post by dest »

walterbell wrote: post #13
bassman9000 wrote: post #6

Aside from Signal and Telegram, is there any worthy alternative?

Matrix/Riot and Wire.com (from ex-Skype team), who are working with IETF to standardize an open protocol for E2E encrypted messaging. We need to get back to open protocols.

Interesting info. Do you have some ressources about this effort of standardization?

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

#118

Post by ythn »

Smirnoff wrote: post #115
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,…

Ok, I agree that some MBAs can be full of it but can we already stop this MBA hate on HN? I feel like lots of people here think that if you build something then customers will surely come. I've got a huge surprise for you. You will have to sell your product and some of the MBA's are really great at that. In B2B a single sale can make or break your company when you're low on cash. You do your job and let them do their…

From my perspective, any company that goes public will eventually turn to crap (or go through decades-long crap/good cycles). It's not MBAs that drive for growth at all costs - I would argue it's shareholders. Shareholders are greedy and don't care about anything else besides ROI. Even if that means throwing the consumers under the bus in the long run to achieve that.

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

#119

Post by balls187 »

iraphael wrote: post #103
xkjkls wrote: post #87

Earlier quoted context omitted.

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".

Was it 1 Brazillian Real or 1 USD?

In many countries, WhatsApp is the defacto communication platform for businesses to communicate with customers.

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

#120

Post by ng12 »

ythn wrote: post #118
Smirnoff wrote: post #115

Earlier quoted context omitted.

Ok, I agree that some MBAs can be full of it but can we already stop this MBA hate on HN? I feel like lots of people here think that if you build something then customers will surely come. I've got a huge surprise for you. You will have to sell your product and some of the MBA's are really great at that. In B2B a single sale can make or break your company when you're low on cash. You do your job and let them do their…

From my perspective, any company that goes public will eventually turn to crap (or go through decades-long crap/good cycles). It's not MBAs that drive for growth at all costs - I would argue it's shareholders. Shareholders are greedy and don't care about anything else besides ROI. Even if that means throwing the consumers under the bus in the long run to achieve that.

Yeah but who do you think is pushing the company to bow to the shareholder pressure?
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