> Mark Zuckerberg
> Jan: I will miss working so closely with you. I'm grateful for everything you've done to help connect the world, and for everything you've taught me, including about encryption and its ability to take power from centralized systems and put it back in people's hands. Those values will always be at the heart of WhatsApp.
Given what's discussed below about the business wanting to introduce features for Enterprise that would weaken encryption it's interesting to see this. Although Zuck only talks about encryption, not e2e encryption. It also strikes me as if he's talking as much to people viewing it as to Jan, and Jan didn't reply, whereas he has with other comments.
So very true.
With $20million per year in revenue, that means it would take over 700 years for Facebook to break even.
Any idiot would know that Facebook would change things up to profit from all those users and he knew it too. He just wanted to grab the money (understandstable) but now pretend like he had no clue (not understandable)
And now suddenly "wake up", after RSUs / stocks have vested, and cry foul: "Clashes over privacy...Values..."
To call it 'disingenuous' is putting it a bit too mildly.
Sorry if I'm too cynical on that; somehow I can't just seem to bring myself to assume good spirit in this case.
Are you sure of this? If they have a billion users, they're earning a billion dollars a year off of this. Considering that they don't need to store messages for an extended period of time, or run analytics, do they really need all that much?
What stops me from getting together a few friends and stealing your business model?
At some point you have to add value just to keep the wolves at bay.
I'd like you to read this and contemplate.
If you didn't bother reading and contemplating, here's the gist:
There is no wolf to fear. We are all finite beings with finite time and resources. You 'stealing' his hypothetical business model doesn't really accomplish anything except tie up your resources retracing his steps. You would be the fool reimplementing the pipe.
Now if you are the type of person who reduces life down to only pursuing the almighty dollar rather than trying to solve difficult extant problems... Well... Maybe that would be worth it to you. Even then though, he has already captured his audience, and he'll likely have a reputation advantage over your copy.
Anywho. Food for thought.
That's not how it works. I'm pretty sure you and I could write a Snapchat clone in a weekend. This doesn't imply we'll ever reach 100M users.
If we assume they maybe averages 75% of that over 6 hours, that's 146Gb/s * (60606)s / 8bytes/byte * 0.75 * 0.05dolars/GB = $14,782.50 for a 6 hour period (estimate).
That's highest listed bandwidth tier price for Azure, I'm sure they would pay less for a number of reasons. But let's just say that $10k for a whole day may not be out of the realm of possibility. That puts bandwidth costs possibly North of $3 million a year. Even at $1 million, that's a lot of money.
And if that's audio/video Vs just text, clever NAT hole punching techniques could reduce it if truly needed.
But, it seems WhatsApp was on SoftLayer? In that case their costs might have been vastly higher.
 http://web.mit.edu/e-club/hadzima/how-much-does-an-employee-... (This is old but nothing really substantial has changed except.)
Also there should be a huge possibility to increase revenue by selling API access (think appointment reminders etc as well as the whole bot ecosystem).
When Telegram started they talked about price and I think I remember being unconvinced. I wanted to pay. As we (used to) say here on HN: if you're not paying you are the product.
(Of course now we have learned that some companies charge us and still sell our (meta)data and advertise to us.)
Have you considered that Facebook might not be telling the whole truth?
"insignificant" compared to what, how much money Facebook makes off of every extra user (who wouldn't want to pay) on their platform? Making it free can only be a profitable move because of what Facebook could do with the data, not because a few million dollars a year is truly "insignificant".
He wanted to be sure they could provide a fast, reliable service and was concerned they might get swamped by an influx of users.
According to the interview:
WhatsApp began as a "status" service. Original iPhone had no background or push notification; user had to start the app to check others' status. When Apple added push notifications to iPhone, they added this to WhatsApp allowing status to be "broadcast".
Users in Europe were paying high prices for international SMS. These users saw that broadcast status notications were similar to international SMS, but free. Some of them suggested this to WhatsApp and so WhatApp added messaging.
Then the app took off.
WhatsApp used FreeBSD, Erlang and SSDs when, according to Koum, everyone in Silicon Valley was using Linux, Apache, MySQL, Perl (LAMP) and HDDs. Compared to others in Silicon Valley, WhatsApp had far fewer servers and employees per user.
PHP, not Perl.
Twitter's failwhale-heavy Ruby experience is a good example. Ruby and especially Rails are good examples of trading hardware for programmer convenience. This is absolutely great when you're banging out an in-house app for 100 people, and there's no problem spending $1 per user-month on hardware. But Twitter's revenue is only $0.60 per user-month, and they need to spend on things besides severs. There is a reason that they needed to switch away from Ruby to a much more complicated architecture: https://blog.twitter.com/engineering/en_us/topics/infrastruc...
I also saw some people go the other direction. They had a Java app for serving a high-volume website. But the developers had a rewrite itch, and the execs were afraid they couldn't get acquired without a more hip technology stack. They even hired a fancy consulting firm to help, but when the first version was ready to go it was incredibly slow. Like two orders of magnitude slower to render a page. The rendering times were considered normal in Rails-land, but were a real problem at volume. So they spent another 6 weeks putting in a lot of caching while the ops people ordered a bunch more hardware.
To be fair it's tiny little messages, I'm talking one device does maybe a meg a day after communicating constantly
The only places he mentions 16 is when he talks about the "multimedia database". I think there were 16 sharded database servers.
I remember reading this when it came out
Having been an infra engineer previously, that pricing sounds reasonable for a messaging service based on infra costs.
That said, they shouldn't need to keep them around for that long, unlike FB and similar.
Even at $1/year - their 1.5 billion active users should be an equal amount of revenue. I'd say that's enough to cover the cost of servers and bandwidth.
However, if you are trying to build a messaging platform, which is what probably FB intends to do, then it requires more investment. Today, you might think that that is where the problem. All the users really want is basic messaging. However, in 3-5yrs from today, the reality may be very different (see WeChat or LINE in APAC) and WhatsApp maybe a complete misfit in that world.
All good products evolve. For something like messaging, if all you provide is a basic product, then you risk yourself being taken over by default platform apps (such as what happened with iMessage on iOS in US). You need stronger lockins and FB is well suited to provide those.
Do users "want" ads? (Assuming they have real choice.)
Is it the "irrelevance" of ads that disrupts aesthetics and insults intelligence?
Or is it something else about advertising?
What assumptions do folks make when they discuss online ads?
Do they assume that they know what would happen if they tried to charge user fees for their "service"?
Do they assume to know what users would do? (e.g., look for alternatives)
Do they assume to know what other software authors would do? (e.g., publish alternatives)
What if Facebook thought that users would stop using the "service" if it was not "free"?
What if Facebook thought it is more profitable and there is less potential for liability to users (who have paid nothing) if the "service" continues to be "free"?
There must be techniques to get around that. Maybe grant free or discounted accounts if you're connected with enough subscribers? Allow subscribers to gift free memberships to their friends? Maybe have a long "initial trial" (e.g. totally free for 1 year)?
I would make sense to me to scale the price to the market. Make it $5 in the US and 5 rupees in India.
Facebook makes $7 per month per user in the US and Canada. So, it's likely fairly close though.
I think YouTube has something like this (in the US) where you can pay monthly for an ad-free experience?
I too would gladly pay (anything reasonable) if it meant they'd split off from Facebook and become in dependent again.
The reason whatsapp got traction in the first place was it was free (for a year+) when SMS was not. If Whatsapp cost $1 then people would use whatever was free.
BlackBerry was the combo of the handset + the backend services hosted by RIM including BBM and people did pay a monthly fee for access to the latter (over and above regular carrier charges)
I don't mean to be too negative, but I'm still very disappointed they sold to FB in the first place. There was no need to do so - WhatsApp's business was sustainable. And surely they must have considered this possibility?
Frankly, I can easily defend his choice of selling to Facebook.
Instead, good point on his vesting.
Let me remind you that elderly people still have very vidid memories of famine and war troubles even 70+ years later.
It seems to me you are just being pedantic.
Personally, if I'd grown up on food stamps and was deeply concerned for my future welfare you can bet I would have sold before the price reached $18bn. I'm quite sure WhatsApp had many offers over the years.
That really depends on what was stated in the terms of acquisition. At the most extreme sue to demerge.
But is that a fight he is willing to accept?
Was it? Sure, they had a lot of users, but most weren't paying. FB said that the revenue was so small that it wasn't even worth charging. They brought in something like 10M on 0.5B users, hardly sustainable.
Why not? Their team was tiny and they spent next to nothing on advertising (nor needed to). $10m seems like a pretty decent amount of money to be spending on servers in a year. (I'm not saying it definitely was fine, just that I wouldn't assume it wasn't)
"Jan: I will miss working so closely with you. I'm grateful for everything you've done to help connect the world, and for everything you've taught me, including about encryption and its ability to take power from centralized systems and put it back in people's hands. Those values will always be at the heart of WhatsApp."
Of course, we do have to look at this response, as well as Koum's original post, through the lens of a PR piece.
>WhatsApp has signed an undertaking declaring that it will not share any EU user data with Facebook until the General Data Protection Regulation (GDPR) comes into force on 25 May.
Acquiring social networks that get to scale is an integral part of Zuck's strategy. It is a fairly smart strategy since one company cannot successfully lead or copy all the innovation - and social networks are very "taste-dependent" products. Zuck understands that Facebook is a big incumbent, and as with any incumbent there would be 'anti-incumbent' products. He was just willing to buy these products without too much fuss.
His willingness to overpay for these companies has been a part of a long-term dominance strategy. Maybe he has one or two misses like Snap; but by and large, his sense for "pricing" these companies and a no-nonsense "Corp Dev" approach could be thought of as a competitive advantage (plus he has proven that he can do it repeatably). The lawyers don't get involved until much later - he "leads" from the front when doing these deals. It is not very common in large-company-land.
If Jan Koum, who is very highly respected (he is truly a no-bullshit product/management person) leaves for the "wrong" reasons, it might have long-term implications for other companies that Zuck wants to buy in the future. Thus leaving an opening in the market for an 'anti-incumbent' offering to thrive.
It feels like there have been surprisingly few internal leaks from Facebook employees, compared to the rest of FAANG. Now would be a good time for someone to blow the whistle.
The main things I use what’s app for is when delivery Drivers or companies message me to say they are on the way or check if I’m home so they change deliver.
I'm pretty certain that they didn't want to sell WhatsApp in the first place, and knew the privacy risks that having Facebook as an owner would bring...but of course $19 billion is enough to settle a lot of issues.
I personally consider WhatsApp to have the same level of security/privacy as Messenger. If you need E2E encrypted messaging use Signal instead.
It’s already a model, and it already works. There are no VCs, there is no exit.
They ask for help once a year, and help is given. Signal could operate very similarly to Wikipedia.
Wire takes a few seconds to sync messages to a powered on device, same as an email client.
If you convince just one of your friends to hop onto signal, it can be useful - make it someone you message a lot and go from there. A few months ago I had just one person I used it for. Now it’s in double figures and growing.
Every hacker who gives a damn should install signal and encourage others to use it. There’s just no downside.
All this "secure" messengers forget about rubber hose decryption that is used in majority of the world.
Luckly, rubber hose cryptoanalysis is not a concern for most people, which is where crypto is needed the most.
Any centralized messaging can not be secure by definition.
A lot of people are forgetting what a lot of NSA types can do with metadata.
(IIRC Italians caught CIA spies with phone number metadata analysis software supplied by... US!)
Any messaging app that is associated with a phone number calling itself "secure" is just maliciously stupid.
Hmm... doesn't sound like the Facebook we all know and love.
So he gloriously exits on principal and plays hero for a day while thumbing his nose at the company that made him rich for the decisions that made him rich.
I'm not saying what he did is a bad thing. It's th human thing. More saying that his position isn't all that newsworthy. It's pretty easy to take a pot shot on your way out the door. If changing minds was his real goal, staying and making change happen from the inside is much more realistic.
I bet the Facebooks learn from these experiences and start requiring NDAs for their acquisitions.
Anyway, someone can just build another Whatsapp.
Looking forward to what he does next. He certainly has the resources to do almost anything that catches his attention.
1:1 chat and phone calls to communicate to your friends, groups to keep in touch with people you are less close to, and status in the extremely rare case that you want to briefly show something to all of your contacts (but without all the problems of FB: your contacts are all people you actually know fairly well, no like and similar bullshits that create so many problems, no pictures stored forever, etc.).
At the same time, I already saw many people switching to telegram. It seems impossible for whatsapp to decline given its current numbers, but who knows really.
> The billionaire chief executive of WhatsApp, Jan Koum, is planning to leave the company after clashing with its parent, Facebook, over the popular messaging service’s strategy and Facebook’s attempts to use its personal data and weaken its encryption, according to people familiar with internal discussions.
So obviously it's meant to spark some sort of discussion on Facebook's attempts to remove security features so that it can monetize the app better.
Network effects are too strong online to allow mergers of this sort and the potential for abuse too great from both state and non-state actors, not to mention invasion of privacy issues.
The bar for mergers and acquisitions ought to be way higher in this domain. If regulation does not fix this I believe these tech companies ought to be divested of these products.
Ultimately paid federated services and free & open source software are the only true countermeasures to these very real threats. I would nearly go so far as to say that we should all chip in to make this become reality.
Note: I do not work for facebook, nor am I huge on any social media, although I am a "light" user of both facebook and twitter.
There must be a better way (albeit more difficult for the software company).
How about users actually paying for it? I’d pay a small amount
I think people "want" there to be an easy solution to this and are just pointing out problems without considering whether such a solution even exists.
In fact, I think Signal has more of that stuff; there's no Gif Search in WA: https://signal.org/blog/signal-and-giphy-update/
Why don't you approach an investor yourself and just start it.
What’s this about weakening WhatsApp’s encryption?
> In 2016, WhatsApp added end-to-end encryption, a security feature that scrambles people’s messages so that outsiders, including WhatsApp’s owners, can’t read them. Facebook executives wanted to make it easier for businesses to use its tools, and WhatsApp executives believed that doing so would require some weakening of its encryption.
Not sure what this means. "Weaken" is kind of a confusing term, FB either has access to the message content to feed in to adsense's gaping maw or they don't.
There is a lot of grey area in between. How metadata is treated, whether encryption is turned on by default, what about the messages are encrypted, how they're encrypted, et cetera.
Are they perhaps implying some kind of central analysis of sent messages for targeting purposes?
WhatsApp was my main counterpoint for anyone using iMessage as a trump card for getting an iPhone with its end-to-end encryption and the status indicator that the other user is typing something.
Wait, you need to do that manually? Most of times whatsapp just tells me that somebody's keys has changed and that's all.
You have to do it again when somebody reistalls whatsapp or moves to anothwr phone. If it's you, you have to do it for everyone. Guess why so few people does it.
Also, the GUI does very little to direct people to verify the keys and confirm that the communication channel is safe.
What the encryption does is prevent non state level actors from breaking into your conversations.
Is this by design or can they be forced by fb to give up the keys which gets stored in the server and still keep functioning? As far as I am aware its the phones which generate and maintain the keys.
Why? Is having a person on the board that provides a moral check on the others a hazard to Facebook's stock price?
Absolutely. You and I can agree it is a good social thing, but when it comes to revenue and growth that can be a huge impediment.