Founders Jan Koum and Brian Acton also hated ads. They'd spent a combined 20 years working at Yahoo bonding over their frustration with a business model that sucked up personal data to show us pop-ups. Building ad systems was "depressing", Koum said in an interview in mid-2014. But not too depressing to sell their chat service to online ad magnate Mark Zuckerberg, CEO of Meta Platforms, just a few months later. Eight of WhatsApp's roughly 50 employees made more than 100-million off that deal, while Koum gained a net worth of 6.8-billion.
This week, just over a decade later, ads are finally coming to WhatsApp. They'll appear in its Updates formerly Status tab, where users post images and videos. Advertisers will also be able to promote Channels there and collect thousands of followers. Meta described the roll-out as "gradual", suggesting WhatsApp users will start to see ads over the coming weeks and months.
Zuckerberg has long been under pressure to monetise WhatsApp, a prominent cash sink whose user base has soared to more than three billion but which has yet to pay its own way. Now, with Meta's costly push into artificial intelligence, including a 14.3-billion investment in data labelling start-up Scale AI, the company is moving on the last big piece of real estate it can squeeze cash from. Meta had already begun monetising WhatsApp through business messaging tools and click-to-WhatsApp ads on Facebook and Instagram, but this is the first time ads are appearing inside WhatsApp itself.
The U-turns are down to the staunch views of WhatsApp's founders, who infused company culture even after they vested their stock options and left Meta. WhatsApp users are also accustomed to a clean, ad-free app that keeps their conversations private with end-to-end encryption. When the company tweaked its privacy terms in 2021 to add more business messaging features, many ditched it for rival apps like Signal and Telegram. Meta had to move slowly.
Now it's trying to make up for lost time. It will target ads based on users' country or city, channels they follow and how they interact with ads they see on Status or on sister apps Facebook and Instagram if their accounts are linked. That's less invasive than the targeting done on Facebook or Instagram, but it's still a form of clutter that WhatsApp's founders abhorred. And Zuckerberg could still push for deeper insights as revenue from Status starts to pour in. According to Schultz, 1.5 billion users visit the feature every day.