Sep 24, 2020
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WhatsApp Just Hired A New Exec To Help It Make Money

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Jan Koum co-founder and chief executive officer of WhatsApp right speaks as Brian Acton. [+] It s hard to believe three years have passed since Facebook dropped $22 billion on WhatsApp and that in all that time the popular messaging app has not significantly changed its business model to make money

 

But now comes a substantial step towards chasing profits: WhatsApp has hired Matthew Idema a senior executive in marketing and advertising from Facebook to be its first chief operating officer a spokesperson for WhatsApp told FORBES. The hiring was first reported by Recode which said that while Idema s role was still being ironed out his new job would see him talk about helping WhatsApp monetize itself

 

WhatsApp announced his appointment internally on Tuesday afternoon. Like WhatsApp s co-founders Idema spent a big chunk of his earlier career in Silicon Valley at Yahoo. Facebook s Mark Zuckerberg brokered his blockbuster takeover deal with WhatsApp in February 2014 on the premise that the corporate would remain independent and that he wouldn t put pressure on its founders Jan Koum and Brian Acton to monetize

 

This even though Zuckerberg bought Instagram for much less ($1 billion) in 2012 and Instagram s revenue has since shot up to $630 million in 2015 according to eMarketer. Matthew Idema (Photo via Facebook) PROMOTED UNICEF USA BRANDVOICE | Paid Program
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2 billion a small annual subscription to use the app and that brought in some million dollars every year in revenue. It also pledged to never show them ads. Then in January 2016 Koum announced in a blog post that the subscription fees were ending and that WhatsApp was exploring ways of charging businesses to speak with its users in an objective useful and basically non-ad-like way

 

That could mean communicating together with your bank about whether a up to date transaction was fraudulent or with an airline a few delayed flight he said. Even back then this goal and the scenarios that contextualised it sounded a touch unrealistic — businesses desire to pay to send you persuasive messages greater than they do informative ones — and that would explain why a year later we have yet to work out examples within the wild of companies chatting to WhatsApp users

 

In joining WhatsApp as COO Idema may take a number of what Facebook has learned from attempting to do similar things on Messenger. In early 2016 Facebook invited businesses to focus on its users through the Facebook News Feed after which chat to them on Messenger with so-called chat bots

 

This was portion of a loudly-touted belief within the tech industry on the time that chat bots were ushering in an age of conversational commerce that would transform the way advertisers engaged with people. Months later Messenger s vice chairman David Marcus admitted to a TechCrunch Disrupt audience that bots got really overhyped really really quickly

 

EU Antitrust Commissioner Margrethe Vestager has accused Facebook of giving regulators incorrect or. [+] While Facebook s ad revenue still soared by almost 60% to $26 billion for 2016 it s unclear how much of that came from chat bots. It was probably not much. Consumers have been slow to warm as much as the idea of interacting with chat bots and paid advertising in messaging applications says Debra Aho Williamson a principal analyst at market research firm eMarketer

 

Facebook s most substantial attempts to earn money from WhatsApp till now came in August 2016 when WhatsApp announced that it’d start funnelling data about its users to Facebook to assist with ad targeting on Facebook. This prompted a backlash from many WhatsApp users who saw the app as a privacy haven due to its default encryption standards

 

It also sparked an investigation by the European Competition Commission into whether Facebook misled regulators about its intentions to take data on WhatsApp users an issue Idema should regulate when navigating WhatsApp s next steps here. Idema s views on advertising seem a minimum of to slot in fairly well with WhatsApp s

 

In a listing of predictions he wrote for Campaign on digital marketing in 2015 he said that companies would increasingly use messaging to interact with customers adding that they d also take a more personalized approach to targeting. Personalized ads — or targeted messages depending on how you want to explain this rather gray area — will be another tricky issue for WhatsApp to navigate considering the fact that it was founded on strict privacy principles

 

But WhatsApp also needs to make good on its obligations to Facebook and that could spell some challenging reassessments with Idema over the coming year

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