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Why we don't sell ads (2012)

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Re: Why we don't sell ads (2012)

#51

Post by collyw »

netcan wrote: post #44

when advertising is involved you the user are the product How about: If you're work at a startup where the business model is 'get acquired,' you are the product. Incidentally, I don't really agree with either of these statements, at least not in their strong forms. The problem with advertising is usually bad advertising. Ads (especially online ads) are usually annoying in inverse proportion to their value. Spam is on…

"Anyway, that's besides the point. This "old" blog hints at something sort of hypocritical or schizophrenic about startup culture."

I had a similar thought just reading the title. But then again, as the CEO of Motorola said when I worked there, "Everyone is coin operated to some extent".

Re: Why we don't sell ads (2012)

#52

Post by collyw »

seunosewa wrote: post #31
wdewind wrote: post #28

Earlier quoted context omitted.

Users pay $1/year after the first year. At almost half a billion active users that's a pretty great business model.

Only a small percentage of their users have ever paid. Most users get to use it free of charge every year.

How do you do that? I paid. I had no intention of paying until I realised Vodafone Spain charged me 80 cents (euro cents) for a text to my Mum in the UK. A text conversation between us had cost me 8Euros, and some of them were just yes / no replies. After that Whatsapp seemed like a bargain.

Re: Why we don't sell ads (2012)

#53

Post by dredmorbius »

awda wrote: post #36
wdewind wrote: post #28

Earlier quoted context omitted.

Users pay $1/year after the first year. At almost half a billion active users that's a pretty great business model.

$500M/yr in raw revenue? How do you grow from there? Lower costs? Grow your revenue? Half a billion is getting close to max adoption. Do you up your prices?

Possibly upsell to some premium set of services, or branch out into other business lines. E.g., Amazon's not just a bookstore any more.

Simple phone messaging, not likely.

But where does phone messaging lead to?

• Other comms services (voice, voicemail, teleconference, video). There's room for improvement in all of these. Look at the one stand-out from G+: Hangouts.

• Sales or transactions. From text messaging to commerce-via-text is a step. Or banking. Both are directly monetized.

• Some level of community-based information service with a commercial component. I've long wondered why more of the social networks haven't gone here.

Or, of course, "get bought by Facebook".

Re: Why we don't sell ads (2012)

#54

Post by collyw »

wdewind wrote: post #50
awda wrote: post #36

Earlier quoted context omitted.

$500M/yr in raw revenue? How do you grow from there? Lower costs? Grow your revenue? Half a billion is getting close to max adoption. Do you up your prices?

Remember how small Whatsapp is (~50 employees). They don't need to do any of those things to have a fantastic business for a long time to come.

What's to stop a free alternative like Telegram taking all the market? Smartphone adoption is still happening here, and I use the rates are much lower in developing countries. Once word gets around maybe everyone will switch.

Re: Why we don't sell ads (2012)

#56

Post by pskittle »

pearjuice wrote: post #26

If you are a vegetarian and you are told to go to a butcher to buy meat, you shouldn't do it out of principle. When you are WhatsApp and you are against advertising - referencing a quote with great aversion towards it - you shouldn't accept billions from a company who is build on the single premise of advertising. They have lost all my trust.

"you shouldn't accept billions from a company who is build on the single premise of advertising."

Facebook wasn't built as a way to earn revenue from ads , it was a way for them to monetize on something they built , albeit -- not appealing to the endusers , however it keeps you connected to people in your social circle . Imagine life without the googles and face books of our time

Re: Why we don't sell ads (2012)

#57

Post by soci »

debt wrote: post #47

The more I think about the acquisition the more I wished WhatsApp would've stayed on their own. $500 million a year is great. I wish they would've pulled a Craigslist and become more of a cultural institution than another acquisition; focus more on making chat amazing. I feel like that would've had a larger, net positive effect on the public consciousness. People would see WhatsApp doing it for what's right(don't be…

I wish they would've pulled a Craigslist and become more of a cultural institution than another acquisition; focus more on making chat amazing.

Well, I guess that when you've raised 58M in funding it's difficult to stay as a cultural institution. Your investors would never allow you to do that.

Re: Why we don't sell ads (2012)

#59

Post by amirmc »

"When people ask us why we charge for WhatsApp, we say "Have you considered the alternative?""

It must be frustrating for those users who really did consider this and thought $1 per year was a bargain. Over time those users may have convinced their friends to sign up and Whatsapp made that choice easy by being available on a lot of platforms.

Everyone has a price. The only way to really avoid this kind of situation is to push things to be decentralised/distributed or fully encrypted. That's even harder to do (but I'm working on it with a bunch of others - see my profile).

Re: Why we don't sell ads (2012)

#60

Post by LaGrange »

netcan wrote: post #44

when advertising is involved you the user are the product How about: If you're work at a startup where the business model is 'get acquired,' you are the product. Incidentally, I don't really agree with either of these statements, at least not in their strong forms. The problem with advertising is usually bad advertising. Ads (especially online ads) are usually annoying in inverse proportion to their value. Spam is on…

You're missing one more part of the issue with advertising: brainwashing. In some ways, I'd rather have a silly, mismatched and ugly ad than an ad that's actually effective at altering my behavior. Pretty much the only situation when I want to see an ad is when I'm looking for a specific product, and there always used to be venues that were very effective at that (specialist press, classifieds, or popular streets where restaurants have their windows). Pretty much anywhere else ads are unwelcome, even if they manage to be "nice", and effectively constitute selling chunks of my brain to get access to Facebook.

And, for the other point, the "tiny, innovative, disruptive startup" is something I've never bought. At best, it's outsourcing the R&D risk, with very few exceptions. So much innovation happens either in academia, or in terrible, huge corporations like Boeing or Stadler.

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