$137.8B U.S. ad spend for top 200 advertisers
Facebook's revenue streams, in part, are reliant on the massive storehouse of data it harvests on its users around the globe.
But not WhatsApp, Facebook's startling multibillion-dollar acquisition. "Your data isn't even in the picture. We are simply not interested in any of it," claimed WhatsApp in a June 2012 blog post explaining why the messaging service doesn't sell ads.
The question on many minds is whether -- or when -- the tables will turn.
The main piece of data WhatsApp needs to enable its service is a mobile phone number.
"WhatsApp is popular because it's private," said Justin Brookman, director of Center for Democracy and Technology's Project on Consumer Privacy. "Part of the value in the trust in the ecosystem is predicated on privacy protection, so Facebook would burn through that goodwill if they tried to change that."
For now, WhatsApp promises the service will remain unencumbered by advertising. "And you can still count on absolutely no ads interrupting your communication," noted the firm in a blog post Monday.
However, WhatsApp's terms of service in the Android ecosystem requires users to approve access to lots of other types of information including geographic location, contacts stored on the phone, personal profile data from contact information, and device ID. Apple iOS users are asked to approve collection of contacts and allow push notifications such as alerts.
The service also purges message content. "The contents of messages that have been delivered by the WhatsApp Service are not copied, kept or archived by WhatsApp in the normal course of business," states the policy. So, theoretically, unlike Google's Gmail or ads on the Facebook site, keywords in messages people send using WhatsApp wouldn't be used to inform ad targeting if ads ever do end up on the platform.
In the short term, Facebook stands to glean more information on emerging markets via the acquisition. Mobile phone service Jana conducts surveys of its users in exchange for phone usage data. The firm discovered that WhatsApp is popular in emerging markets. In Brazil, 63% of Jana survey participants said WhatsApp is their most-used messaging service, compared to 5.58% who named Facebook as their go-to message app. In India, WhatsApp was the favorite of 55% compared to 0.85% for Facebook. In Mexico, 76% said they prefer WhatsApp while just 5% said Facebook.
With the acquisition, Facebook aims for better engagement with users in emerging markets, suggested Nathan Eagle, Jana's cofounder and CEO. "Data in general is not really [WhatsApp's] focus," he said, adding that perfecting a fast, efficient and inexpensive messaging service is "their laser focus."
If Facebook succeeds in maintaining and building high user engagement with WhatsApp, it could drive those users to Facebook where they will see ads, potentially targeted with data enriched by WhatsApp use.