Lecture on WhatsApp's Acquisition and Privacy Concerns

Overview

10 years since Facebook announced purchasing WhatsApp for $22 billion.
Initial assumption: Facebook acquired WhatsApp for user data to serve ads.
WhatsApp has end-to-end encryption, supposedly preventing ad usage based on text content.

One of the largest tech acquisitions in history.
Surprised many due to WhatsApp's lack of a strong business model at the time.
WhatsApp originally had around 450 million users; service free except for a $1 yearly fee for some.
Its success predominantly outside the U.S. where SMS was expensive or less reliable.

Founded in 2009 by Jan Koum, initially as a status update platform.
Early pivot to messaging after push notification feature introduced by iOS in mid-2009.
WhatsApp Messenger released in August 2009, adopted by 250,000 users quickly.
Brian Acton, another Yahoo employee, joined and became co-founder through investment.

Initial messages readable by servers and potentially usable for targeting ads.
2011: Security exploit discovered that allowed account hacking.
WhatsApp introduced encryption; initially, messages encrypted during transmission but still readable by servers.
Governments raised security concerns, leading to adoption of end-to-end encryption.

Uses Diffie-Hellman key exchange mechanism and its newer version, X3DH.
Only the sender and receiver can decrypt the messages, making interception ineffective.
Current computing power inadequate to break this encryption.

During acquisition, WhatsApp founders had some verbal and written agreements with Facebook on monetization practices.
Projections for WhatsApp revenue were ambitious ($10 billion/year by 2019).
Founders resisted ad integration, favored metered usage model, but were overruled.
Disagreements led to founders leaving Facebook.
Facebook linked WhatsApp profiles to their servers, breaking initial promises.
2017: EU fined Facebook €110 million for linking accounts deceptively.

Facebook gathers extensive data from WhatsApp user profiles and usage patterns.
Combined with existing data from other platforms like Facebook and Instagram.
Facebook Pixel tracks user activity across websites for ad targeting.
WhatsApp’s role in business communications globally, especially in developing countries.

Adopted by businesses for customer interaction due to ease of use and customer accessibility.
Facebook integrates features like payments, Shops, and advertisements within WhatsApp.
Messages stored on Facebook servers for businesses, potentially accessible by them.

Despite encryption, the privacy complex regarding business communications and broader data mining remains a concern.
Evolution into a super app indicates strategic adaptation, with implications for both privacy and user experience.