Facebook makes U-turn on plans to sell ads on WhastApp
When Facebook bought WhatsApp in 2014, it was only ever a matter of time before Zuckerberg and Co. monetized the popular messaging app. plans to sell ads on the app were unveiled in 2018. Today, in a dramatic U-turn, Facebook has reportedly shelved those plans.
According to the Wall Street Journal, Facebook has disbanded the team it put together to figure out the best way to integrate paid advertising into WhatsApp and removed all of the code they had already produced from the messaging app.
It is not clear whether the plans to sell ads on WhatsApp have been canceled completely or if they are just on hold, but the WSJ reports that Facebook is going to focus its efforts on building features for its business users for now. WhatsApp's business platform charges a small fee to help small businesses connect directly with customers, and it is particularly popular in developing countries. There have also been experiments with a payment platform in India.
Plans announced in 2018 involved putting ads in WhatsApp's Status feature, much like we see on Instagram's Stories today. The decision to monetize WhatsApp was not popular with those who started the company before the Facebook acquisition, and co-founder Jan Koum cited the move to sell ads as one of the main reasons he left the company at around the same time. Brian Acton, the other co-founder, had left a year earlier following the Cambridge Analytica scandal, but both Koum and Acton had called ads “insults to your intelligence” in a previous blog post before the Facebook billions landed on their desk.
Despite the fact that WhatsApp has more than 1.6 billion users, it does not generate any money for Facebook. There used to be an annual $0.99 subscription fee but that was scrapped after Facebook took over the company. What the messaging app does do, however, is generate data. The social media machine started sharing data between WhatsApp and Facebook in 2016 in order to improve ad targeting. It seems like, for now at least, that this will remain WhatsApp's primary function in terms of generating income for Facebook.
Do you use WhatsApp? Share your thoughts on Facebook's U-turn on advertising on the platform in the comments below.