Page 67 - Forbes Magazine-October 31, 2018

FORBES BRIAN ACTON

al,” says a Facebook spokesman. Acton remembers. He was now seeing history repeat. “This
“It just makes me angry to even relive that,” Acton says. is what I hated about Facebook and what I also hated about
Linking these overlapping accounts was a crucial first step Yahoo,” Acton says. “If it made us a buck, we’d do it.” In other
toward monetizing WhatsApp. The terms-of-service update words, it was time to go.
would lay the groundwork for how WhatsApp could make Meanwhile, Koum stayed. He would accrue time toward
money. During the discussions over these changes, Facebook his final stock grants, even if he rarely went to the office (“rest
sought “broader rights” to WhatsApp user data, Acton says, and vest,” in Silicon Valley parlance). Koum was “able to get
but WhatsApp’s founders pushed back, reaching a compro- through it,” finally leaving this April, the month after Acton’s
mise with Facebook management. A clause about no ads #deletefacebook tweet, announcing via a Facebook post that
would remain, but Facebook would still link the accounts to he would focus on collecting air-cooled Porsches. In August
present friend suggestions on Facebook and offer its adver- 2018, when Forbes sat down with Acton, another source said
tising partners better targets for ads on Facebook. Whats App Koum was sailing on a yacht in the Mediterranean, far away
would be the input, and Facebook the output. from everything. He could not be reached for comment.
Acton and Koum spent hours helping to rewrite the
terms of service and were stymied by a section on messaging IF WALKING AWAY FROM $850 MILLION feels like penance,
from businesses. “We obsessed over these two paragraphs,” Acton has gone further. He has supercharged a small mes-
Acton remembers. It was here that they lost a battle against saging app, Signal, run by a security researcher named
the ad model, when a lawyer strongly advised them to in- Moxie Marlinspike with a mission to put users before prof-
clude an allowance for “product marketing,” so that if a busi- it, giving it $50 million and turning it into a foundation.
ness did use WhatsApp for a marketing purpose, Whats App Now he’s working with the same people who built the open-
source encryption protocol that is part of Signal and pro-
tects WhatsApp’s 1.5 billion users and that also sits as an op-
ACTON WAS NOW SEEING tion on Facebook Messenger, Micro soft’s Skype and Google’s
Allo messenger. Essentially, he’s re-creating WhatsApp in the
HISTORY REPEAT. “IF IT MADE pure, idealized form it started: free messages and calls, with
US A BUCK, WE’D DO IT.” end-to-end encryption and no obligations to ad platforms.
Acton says that Signal now has unspecified “millions” of
wouldn’t be held liable. users, with a goal to make “private communication accessi-
WhatsApp’s founders then did what they could to post- ble and ubiquitous.” While Acton’s $50 million should take it
pone Facebook’s monetization plans. During much of 2016, a long way—Signal could afford only two full-time engineers
Zuckerberg was obsessed with the competitive threat of Snap- until he came along—the foundation wants to figure out a
chat. This made it easier for WhatsApp to put moneymaking perpetual business model, whether that means taking cor-
on the back burner and report on new product features that porate donations like Wikipedia or partnering with a larger
aped Snapchat’s: a new camera that let you add emojis to pho- company, as Firefox has done with Google.
tos in October 2016, and Status in February 2017, which was Others have come into the space as well. AnchorFree, a
widely seen as a clone of Snapchat Stories. software company in Redwood City, California, makes a virtu-
By then, three years since the deal, Zuckerberg was grow- al private network that hides your online activity and has been
ing impatient, Acton says, and he expressed his frustrations downloaded 650 million times. The company has raised $358
at an all-hands meeting for WhatsApp staffers. “The CFO million and is reportedly profitable. The private search engine
projections, the ten-year outlook—they wanted and needed DuckDuckGo is grossing $25 million a year, showing ads but
the WhatsApp revenues to continue to show the growth to without using your search history to build a secret profile like
Wall Street,” Acton recalls. Internally, Facebook had targeted Google does. Regulators in many countries are similarly push-
a $10 billion revenue run rate within five years of monetiza- ing back on ad tracking. Saul Klein, one of London’s leading
tion, but such numbers sounded too high to Acton—and re- venture capitalists, predicts that Facebook will eventually be
liant on advertising. forced to offer an ad-free subscription option. Acton’s metered
Acton had an alternative that he tried pushing back with: model, in other words, might get the last laugh.
Invite businesses to send “informational, useful content” to Acton, for his part, is trying to look forward. Besides Sig-
WhatsApp users, like the SMS from his Honda dealer, but don’t nal, he’s put $1 billion of the Facebook proceeds into his
allow them to advertise or track data beyond a phone number. philanthropic arms, to support healthcare in impoverished
He also pushed the metered-user model. Both to no avail. areas of the U.S. as well as early childhood development. He
Acton had left a management position on Yahoo’s ad di- also says he’s determined to raise his kids normally, from
vision over a decade earlier with frustrations at the Web por- public schools to that Honda minivan to a (relatively) mod-
tal’s so-called “Nascar approach” of putting ad banners all est house. Acton notes, however, that it’s just one mile away
over a Web page. The drive for revenue at the expense of a from Zuckerberg’s compound. Extreme wealth, it seems, is
good product experience “gave me a bad taste in my mouth,” “not as liberating as you would hope.” F

58 | FORBES OCTOBER 31, 2018