WhatsApp taps out of Fight Club; succumbs to advertising to Facebook
This comes as a big departure for the company that positioned itself to its users in 2012, with a blog post from founder Jan Koum, now the CEO of WhatsApp and a Facebook Board member, titled, 'Why we don't sell ads'.
In the blog, Koum quoted Tyler Durden from the Fight Club
"Advertising has us chasing cars and clothes, working jobs we hate so we can buy shit we don’t need." - Tyler Durden, Fight Club
Koum told the users of the service in the blog, that they wanted to create a product that people used because it helped them save money and made their lives better.
"These days companies know literally everything about you, your friends, your interests, and they use it all to sell ads....
...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," he wrote.
"Advertising isn't just the disruption of aesthetics, the insults to your intelligence and the interruption of your train of thought. At every company that sells ads, a significant portion of their engineering team spends their day tuning data mining, writing better code to collect all your personal data..." - Jan Koum
But it now seems like Koum, whose product was bought by social media giant Facebook for a whooping $19 billion in 2014, has tapped out of the Fight Club.
While WhatsApp gives you the option to opt out of being subjected to target advertising from Facebook within the first 30 days, your information will, nonetheless, be shared with the platform.
WhatsApp, however, maintains that this doesn't mean that there will be in-app banner ads.
"...We want to explore ways for you to communicate with businesses that matter to you too, while still giving you an experience without third-party banner ads and spam."
The blog post says that while the chat messages will still remain encrypted after Whatsapp rolled out the end-to-end encryption, thereby making your conversations private to Facebook and to even Whatsapp, your phone number will shared with Facebook. "And by connecting your phone number with Facebook's systems, Facebook can offer better friend suggestions and show you more relevant ads if you have an account with them," it said. Which basically means you will be party to target advertising from Facebook.
With 80% of Facebook's advertising revenues coming from mobile, using WhatsApp's user base to cash in was the next obvious move.
Facebook reported a massive 63% rise in its advertising revenue in Q2 2016 to $6.2 billion from $3.8 billion in the same quarter last year. Advertising on mobile devices accounted for 84% of Facebook's $6.2 billion in advertising sales. This puts Facebook's mobile advertising revenues at a massive $5.2 billion.
“Remember, when advertising is involved you the user are the product,” Koum told WhatsApp's users in 2012.
We have a new Fight Club quote suggestion for the WhatsApp CEO --
“The things you used to own, now they own you.” -- Chuck Palahniuk, Author, Fight Club