Zuck eyes WhatsApp’s strengths to write Meta’s next chapter

NEW YORK: When Facebook bought WhatsApp for $19 billion nearly a decade ago, Mark Zuckerberg made a promise: The Facebook chief said he wouldn’t meddle often with the messaging app so as not to mess with a good thing.

Zuckerberg stuck to that philosophy as WhatsApp amassed more than 2 billion users — until 2019, when he began tapping the app’s growth and business potential.

Now WhatsApp has become increasingly crucial to Meta, the company that owns Facebook, Instagram and other apps. More than half of Americans ages 18 to 35 who own a cellphone have installed WhatsApp, making it one of Meta’s fastest-growing services in its most mature market. Ads on WhatsApp and its sister messaging service, Messenger, are also growing so rapidly that they may reach $10 billion in revenue this year.

WhatsApp’s momentum is a reminder that Meta remains at heart a business powered by its family of social apps. Although Zuckerberg has spent billions of dollars in recent years on his future-facing vision of the immersive digital world of the metaverse and on artificial intelligence, apps such as WhatsApp are bringing in new users and revenue. That makes it one of the keys to his company’s future, enabling Meta to explore costly, experimental and unproven products.

WhatsApp has also become a backbone of Meta’s business in what Zuckerberg has declared to be “a year of efficiency.” After global economic uncertainty last year caused an advertising slump, Meta cut nearly a third of its staff. It remains reliant on its core apps to deliver steady sales growth and to appeal to Wall Street.

In the interview, Zuckerberg positioned WhatsApp as a “next chapter” for his company. The messaging app could become a cornerstone for business messaging, he said, as well as a primary conversation app. A decade ago, WhatsApp was a different app — by design. Jan Koum and Brian Acton built it as a fast, free and secure way to exchange messages with friends and family.

Importantly, WhatsApp used a data connection instead of mobile carriers’ SMS messages, which often cost money. The service also didn’t store people’s messages on its servers. And it didn’t have some bells and whistles that other apps, such as iMessage, do, which allowed it to run quickly and easily on even slow data connections.

Zuckerberg snapped it up in 2014 after it received overtures from Google and Tencent. He initially left most decisions to its founders, who had stayed on. Koum and Acton bristled at talk of making money and advertising. In April 2016, WhatsApp rolled out end-to-end encryption, which keeps messages from being intercepted or viewed by parties outside the conversation.

But by 2019, Zuckerberg was champing at the bit to assert more control over his company’s apps, tying them together so they would share data and technology. That led to the departures of WhatsApp’s founders and other employees.

Zuckerberg has since built WhatsApp into a more fully fleshed-out messaging service and business, adding features like simple emoji reactions and message forwarding to disappearing messages and supporting the app across other devices such as desktop computers.

WhatsApp also began offering paid tools and custom apps for businesses that wanted to use the platform to communicate with consumers. In 2017, it introduced “click-to-message” advertising, a format that businesses can buy to place inside a Facebook feed. When users click on the ad on Facebook, it links them to a brand’s WhatsApp account, where they can talk with customer service or take an action such as buying goods. The ads have become Meta’s fastest-growing ad format.

Still, WhatsApp is contending with competitors and regulatory hurdles. In Europe, WhatsApp may be forced to integrate with competing messaging services as part of the requirements under a new law, the Digital Markets Act. The company has said it has begun the difficult technical work of making sure that WhatsApp users can send messages to rival apps in the region.

Some regulators have also pushed against encryption, a key feature of WhatsApp and iMessage, saying it makes it more difficult for authorities to monitor or catch criminals.