Nothing is free in life anymore, not even WhatsApp
WhatsApp is a service used by over a billion people. Yet, the company probably makes less than a few millions in pure. And that too we don't know. It is even possible that it doesn't make any profit at all.
Until the January this year, it used to charge people a token sum of around one dollar per year after the first year of free use. So you can say that it had some paying customers. But then WhatsApp decided to go completely free.
The question then is, why it is "free"? The answer came on Thursday. It is not free.
Until now WhatsApp has avoided monetising the user data it has. Over a billion people, all with a phone number and the fairly active smartphone connectivity are rich source of data that can be used for some local and fairly personal advertisements. But so far, WhatsApp hasn't done that. But since Thursday, things have started to change.
WhatsApp is owned by Facebook, another "free" service. FB also happens to be one of the top firms when it comes to revenue from mobile ads.
It was just a matter of time before the firm started using WhatsApp data in some way to monetise the service. After all, it paid over $19 billion for WhatsApp in 2014!
It does sound like a betrayal from WhatsApp when it says that it would share some of the user data with Facebook. When it was sold in 2014, WhatsApp cofounders had assured users that WhatsApp would not use the user data for advertisement purposes.
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But that is changing, even if in a smaller degree. It's still not the full-blown use of all the user data that WhatsApp has. But it's the start.
If you are outraged about it, it is understandable. But then so is the position of WhatsApp. This is a service that a company -- in this case Facebook -- provides for "free". There is a team behind WhatsApp, bringing users all the cool features it has. It has to somehow, in some way make money. And the best way to make money on the web, as Google and the Facebook have shown again and again, is by offering "free" services and then monetising them with the advertisements.
Sure you can outrage but that is also quite naive. Long before the internet pervaded our lives, Milton Friedman popularised the phrase "there ain't no such thing as a free lunch". What was true then is true now. It fact, it rings closer to home now than it did earlier.
WhatsApp sharing some data with Facebook is not something that is the right cause for outrage. It needs to make money and hence it will use the data it has in a way that can bring it some bucks. Google's Gmail does that. And so does Facebook.
The only point on which you can fault WhatsApp is that it doesn't give different options to users -- option to pay. Ideally, it should also have an option, where a user can opt out from its ad plans, and then pay a monthly or yearly subscription fee to use the service.
That ways it can also safeguard their privacy as well as earn enough revenue to sustain itself. As far as "free" users are concerned, they should be ready to accept some privacy trade-offs in lieu of the service.