> For Messenger, I think differentiation is extremely important and something we haven't focused on yet. We've spent the past 6-12 months catching up to WhatsApp and competitors on table stakes like performance, reliability, pushability, etc. This work isn't done and we will continue to do it, including catching up in areas like groups.
> But to get people to ditch WhatsApp and switch to Messenger, it will never be sufficient to be 10% better than them or add fun gimmicks on any existing attribute or feature. We will have to offer some new fundamental use case that becomes important to people's daily lives.
They never did catch up on table stakes, nor did they discover that new fundamental use case. But they had a good fallback plan: Just buy WhatsUp.
Bummer for the users, though.
I find myself wishing something along the lines of antitrust was enforced more rigorously to help preserve competition.
And yet their purchase of WA shows Zuck's ruthlessness and business genius. He saw his team fail to beat WA, he realized they would never beat them, and he made a decision to buy WA for what was an insane price.
16 billion dollars for a 24(?) person company with no revenue.
I think 99% of executives on earth wouldn't have made that decision. They would have believed their teams that said victory was around the corner, or deluded themselves into thinking success was inevitable, or would have been afraid to demoralize their team, or would have rationalized away why messaging wasn't important after all.
He just acted and won, for what now seems like a bargain.
It was a smart acquisition for sure, but "ruthless business genius" is a bit of hyperbole imho. FB's market cap was in excess of 200B at the time and they were growing like crazy. 16B on buying what they had failed to build internally and needed as a moat around their core business seems pretty straightforward.
Mere mortals like us just get caught up on all the extra zeroes these guys are playing around with.
Exactly, spending 10% (!) of your business to buy something that adds no revenue, was built by 20 people, where your team is working on an alternative that is "better", "just around the corner", etc is actually insanely counterintuitive. If it were one percent of the business, sure, play defense, whatever--but 10%, over an abstract notion of "defensibility" is a really hard pill to swallow.
It would be amazing to know what the FB board thought at the time, and if zuck had to push hard for the transaction or not .
> Exactly, spending 10% (!) of your business to buy something that adds no revenue, was built by 20 people, where your team is working on an alternative that is "better", "just around the corner", etc is actually insanely counterintuitive.
It's not, and Facebook of all companies knows why. What they have is not some stupendous, irreplaceable technology. What they have is users and their relationships. That's how they killed myspace, not with revenue, not with their employee count, and not with their masses of technology, but with their users and the network effect. And that's how they will be killed.
Zuck controls the board though! Majority voting rights. Still, have to give it to him. Need guts to make such a call. WA and Instagram, the Crown Jewels of Meta.
Then again, nobody wins all the time (cough oculus cough).
I don’t think Facebook’s social graph / ad-based business model can be connected to a successful hw/sw XR experience.
However, Oculus is way too early to call as a bad bet.
Oculus could be like late model, pre-touchscreen Blackberry.
Where it is proving potential and demand for a new type of connectivity, but unable to leap forward far enough and fast enough to counter an entrance from Apple.
It could pivot its business model and become the most successful XR platform for Android users, consolidating support from Epic, Snap and others.
If Zuck wrote that email in 2013, he knows the headwinds against this direction and I don’t think he’s reached the Bowling Alley scene of There Will Be Blood quite yet.
Not sure what you allude to with Oculus, but the Oculus Quest is the best selling VR headset ever and is growing like crazy. With their research, they've also pushed the technological boundaries (things like inside out tracking, the new pancake lenses coming with Cambria by the end of this year, passthrough).
I truly believe that VR headsets will become the major computing platform. Not in the next 5 years, and not overnight, but eventually.
They sell Quest units at a loss and absolutely nobody is using VR to interact with any of Facebook's properties in a meaningful way. As of right now, it's a total distraction to their core business.
Granted, Oculus makes fantastic products that are making VR more accessible. However, as a business, it has been investment heavy[1]. Meta continues to make 10s of billions of dollars worth of investment to build an ecosystem around it.
I don’t think Zuck foresaw the level of investment he’ll need to make before turning profit.
Oculus (and the “Metaverse”) is a 10-20 year play, betting on people changing their habits and using VR as their primary medium of engagement online. They’re trying to build an iPhone/iOS like integrated hardware and marketplace experience, but it remains to be seen if they’ll be profitable as a business.
I surely wouldn't want to bet against Zuck, having bought multiple Quest2s, it surely has hit the product-market fit! Unless Apple steals their lunch coming year, Meta is going to be a big hit.
The quest2's standalone casual gaming capabilities are great - it's easy to setup a party guest for a round of beat saber in a couple of minutes, reminiscent of how accessible the Wii was
if the rumors of Apple's device costing $2000 are correct, they're not going to push the Quest out of that market.
You don’t need to respect him but continuing to disregard the intelligence of people you’re against (or not ) arbitrarily isn’t a smart move. Zuckerberg has proven beyond doubt that he’s more of a visionary than all other tech bro cEOs he gew along side.
In addition to the agreed price of $16B, Facebook added $3.6B to retain employees. WhatsApp had 55 employees at the time [0]. Near the end of the referenced article is an interesting comparison of different prices/employee for other acquisitions.
Most of users never paid it, and skeleton of the team they had was supported also by contractors, and most importantly, ignoring any abuse. That was ok in those days, but it wasn’t sustainable as they grew. Dealing with abuse, spam, misinformation is very costly, even when you’re e2ee.
I don't trust big tech to regulate truth, but let's not dismiss misinformation with such broad strokes.
There are deliberate attempts by politically and monetarily motivated groups to spread objectively false propaganda. FUD/HODL to mislead investors, conspiracy theories to sway public opinion, pseudoscience to peddle ineffective medical treatments... The people doing this effectively aren't individuals disagreeing with mainstream discourse, they know exactly what they're doing.
According to Wikipedia: "Misinformation is incorrect or misleading information presented as fact. It is differentiated from disinformation, which is deliberately deceptive."
> I think 99% of executives on earth wouldn't have made that decision.
We conclude, 99% of executives are geniuses. I just feel like the term 'genius' gets thrown around inflationary. Being successful != being a genius. There is more to it (it actually isn't even a requirement) . At least I want to believe that.
> 16 billion dollars for a 24(?) person company with no revenue.
You are minimizing the impact of WA….. by a lot. At that time, almost all the smartphone users in India were using WA. The transaction gave FB all of those ~half billion users in just one shot.
It’s notable here that none of the founders of IG and WA are with Meta today - due to ethical differences.
I think they did, just not in the way they expected. They've developed a messaging platform where finding the user you want to message is handled outside of something as arbitrary and transitory as a phone number.
For example, military members (in the US) rely heavily on FB Messenger because deployments, short tours, and overseas assignments kill the reliability of using a regular phone number to maintain contact with friends and family. Messenger handles that by connecting via Facebook and maintaining that connection regardless of the users' phone numbers or email addresses.
Back in the early days that was the only way these services operates: AOL IM, MSN Messenger, ICQ, IRC, Yahoo! Messenger, Google Talk, Skype, MySpaceIM etc.
Even now you have Discord, Slack, Steam Chat… and that’s before you start taking federated services like (Matrix and XMPP) or other social networks (like Twitter, Reddit, etc) into account.
This shift to using mobile numbers is a recent change. And not one I’m particularly fond of either.
When your phone number changes, WhatsApp asks if you want to change your number. You don't have to accept this, it will work fine on your old number. It is risky if you lose the SIM card but it works, I continued using an old number for three or four years after changing numbers and I was never forced to prove that I still was the owner of the old number.
And when your old phone number gets re-used by the telco, some random person will start getting your messages.
A friend was quite freaked out when multiple afgans started messaging him on whatsapp on their "new" phone number. Apparently it formely belonged to a member of the local afgan diaspora.
Thankfully they ware able to get a new number from the telco to deal with it.
What didn't they catch up on? To me Messenger seems like a better user experience than WhatsApp or any of the other three messaging clients I need to use.
Indeed WhatsApp is lacking basic functionality like a desktop app.
Also, a client tied to a phone number may work well for some people, but a pain whenever you change your number, and it makes discovery of people much harder.
Does my phone need to be on/connected to the internet for it to work? That's always been the weird thing for me about Whatsapp, is that your phone seems to be the "server" for the app.
Except now it won't sync older messages and sometimes messages only get delivered to your phone but not the desktop. They took a decade to roll out a desktop app and even then it's a mess. WhatsApp has been degrading under Meta's ownership.
I know everyone else in the west seems to use WhatsApp but in my social circle I connect to nearly everyone via FB Messenger. I have but don't use WhatsApp. I have no idea what it provides that FB Messenger doesn't provide and better. I don't need a phone number for FB Messenger. I can access it trivially at messenger.com, no need for the crazy QR code non-sense of WhatsApp. I also do not have to give FB Messenger access to my contact list, unlike WhatsApp (maybe that's changed but it used to be required).
WhatsApp doesn’t provide anything messenger doesn’t. As far as I can tell, WhatsApp as a product reached its ‘market fit’ years and years ago, in that they stopped bothering trying to add anything to it. Real pity in some ways its not even slightly extensible
I mean you could just tell how unpopular WhatsApp is in the US. I still remember no one in the US have heard of Whatsapp when Facebook announce the 16B acquisition.
But WhatsUp could certainly be another Startup idea.
I went to college in the USA, and none of my classmates had any idea what WhatsApp is.
Funnily enough, my US university's "international office" (the department that deals with international students including facilitating visas, travel signatures, SEVIS, resolving other confusions of international students etc) setup a WhatsApp group to communicate with all international students because that's the one app all of us had in common.
As far as I can tell, there seems to be a great deal of competition in the messaging app space, in addition to Whatsapp and Messenger, you have Hangouts, Signal, Viber, Telegram, Wire, Skype, Slack, Discord, and of course good old SMS. And these are just off the top of my head.
I would not be surprised if we see more consolidation in the sector.
In what sense? The table stakes of boring functionality seem to me to be much better implemented in messenger than whatsapp. Everything from a more intuitive UI to a web option is better done in messenger.
I'd say Zuckerberg is the clear loser in this story: what could be worse than failing to catch up with WhatsApp and discovering a new fundamental use case?
Failing, then spending an obscene amount of money on buying WhatsApp, then seeing a considerable part of that money enabling the Signal Foundation and watching Signal eat up the user base of both WhatsApp and the Facebook Messenger. Users are fine.
Telegram has made some impressive strides over the past few years (it's quite mainstream as a messaging platform and social platform in some countries)
Idk, I feel like Telegram is viewed more like a subscription based twitter feed. It’s more about pushed updates to groups of people then communication between loved ones. (It’s also used a lot as a support medium, although I wouldn’t considered forced adoption for support or even notification as an indication of user adoption that’s like saying EV adoption is trending up while some areas almost force conversion).
Here in India, Whatsapp is pretty much a basic utility. A small vocal percentage moved to Signal around the time of Whatsapp's privacy policy furore. But anecdotally, most of them have moved back to Whatsapp because ditching it would mean ditching contact with most of their social circle.
Using several messengers is what enables competition between them in the first place. It's great for the ecosystem. All messages end up in my notification bar anyway, irrespective of the underlying app.
In my German peer group almost everyone is on Signal as well as WhatsApp. (... and Telegram, for that matter.)
Definitely happening in my little corner of humanity. Not happening as in usage of the Meta messengers has dropped to zero, but it's becoming more and more like "funny how this group is still on WhatsApp, do they
live under a rock?" At least FB messenger has a tiny niche left as the way to communicate if you are connected on FB but haven't shared phone numbers.
Whatsapp is still by a longshot the most used messenger app across the world. The user you're responding to is just pulling a "Nobody goes there anymore, it's too crowded"
It's definitely happening in some circles. I was quite surprised to hear that my dad's reasonably active sibling chat group uses Signal, and we're talking about a dozen+ mostly technologically-inept people aged 40-70.
To give an example of how inept, my dad recently discovered that iOS Safari has tabs, and he's had a smartphone for close to a decade and uses Safari heavily. I have no idea what prompted them to switch away from WhatsApp, and before that, GroupMe (which they used for a while because it worked through SMS), but they did.
That tells you nothing about a trend though, right? We'd have to look at this over time to see if people are actually moving to/starting to use signal.
If you look at the data over time, you'll find that both Messenger and WhatsApp have grown MAUs every quarter since their existence. You're free to draw your own conclusion to the question.
Bummer for the users who chose WhatsApp over Messenger. Many didn't want a company, like Facebook, to have PII on them, yet FB just bought it all up pretty much screwing these people.
It's telling that Watsup did never "catch up" on performance reliability, and pushability. They started top notch on those, and if anything, moved down a bit with time.
That's because you simply can't catch up on those. It's not something that happens inside the constraints of software development. That's why Facebook didn't.
"Catching up" is even a very weird way to say it. That wording implies Watsup was a huge entrenched company with a lot of resources spent on development, and Facebook was a nimble team that was working hard to add enough development effort to be an equal.
> But to get people to ditch WhatsApp and switch to Messenger, it will never be sufficient to be 10% better than them or add fun gimmicks on any existing attribute or feature. We will have to offer some new fundamental use case that becomes important to people's daily lives.
They never did catch up on table stakes, nor did they discover that new fundamental use case. But they had a good fallback plan: Just buy WhatsUp.
Bummer for the users, though.
I find myself wishing something along the lines of antitrust was enforced more rigorously to help preserve competition.