Before Facebook's outrage over Apple's privacy policy, it paid billions for firm with same anti-ads
After Apple's Tim Cook said users of ad-based services "are the product" rather than the customer, Facebook chief executive Mark Zuckerberg scoffed at the idea as "the most ridiculous concept." However, the WhatsApp messaging service Zuckerberg paid $22 billion to acquire espoused that same "ridiculous" philosophy two years ago.
In September, Cook published "Apple's commitment to your privacy," a note that drew attention to the difference between Apple's products and competing ad-centric services that rely on monitoring users' behavior and collecting their data.
"A few years ago," Cook wrote, "users of Internet services began to realize that when an online service is free, you're not the customer. You're the product."
Zuckerberg responded by expressing "frustration" and displaying "irritation" in an interview with Time last week, complaining that "a lot of people increasingly seem to equate an advertising business model with somehow being out of alignment with your customers."
After referring to that idea as "the most ridiculous concept," Zuckerberg responded, "What, you think because you're paying Apple that you're somehow in alignment with them?"
In the summer of 2012, WhatsApp founders Jan Koum and Brian Acton published "Why we don't sell ads" on the company's official blog. The post outlined the founders' combined 20 years at Yahoo selling ads, while witnessing Google become even better at selling ads, more efficiently and profitably through better audience targeting.
"When we sat down to start our own thing together three years ago we wanted to make something that wasn't just another ad clearinghouse," Koum wrote.
"We wanted to spend our time building a service people wanted to use because it worked and saved them money and made their lives better in a small way. We knew that we could charge people directly if we could do all those things. We knew we could do what most people aim to do every day: avoid ads."
Koum then detailed a contempt for ads that made Cook's salvo appear timid in comparison.
"No one wakes up excited to see more advertising, no one goes to sleep thinking about the ads they'll see tomorrow," he wrote, adding, "Advertising isn't just the disruption of aesthetics, the insults to your intelligence and the interruption of your train of thought."
Koum then detailed, "at every company that sells ads, a significant portion of their engineering team spends their day tuning data mining, writing better code to collect all your personal data, upgrading the servers that hold all the data and making sure it's all being logged and collated and sliced and packaged and shipped out... And at the end of the day the result of it all is a slightly different advertising banner in your browser or on your mobile screen."
Then, emphasized with bold highlighting and the white space of existing as its own paragraph on the page, Koum added:
"Remember, when advertising is involved you the user are the product."
He concluded, "at WhatsApp, our engineers spend all their time fixing bugs, adding new features and ironing out all the little intricacies in our task of bringing rich, affordable, reliable messaging to every phone in the world. That's our product and that's our passion. Your data isn't even in the picture. We are simply not interested in any of it."
Koum then asked, "When people ask us why we charge for WhatsApp, we say 'Have you considered the alternative?'"
One month later, Koum posted in March additional comments clarifying that, "if partnering with Facebook meant that we had to change our values, we wouldn't have done it."
He attempted to shut down any speculation that might leave users "thinking we're suddenly collecting all kinds of new data. That's just not true, and it's important to us that you know that," he wrote. "Make no mistake: our future partnership with Facebook will not compromise the vision that brought us to this point."
Zuckerberg's heated charge that it was "the most ridiculous concept" for Cook to be critical of ad-centric products while Apple worked to protect users' privacy is hard to reconcile with the fact that Facebook paid a record amount to buy up a messaging company that expressed the exact same "you are the product" sentiment, particularly given that Zuckerberg ensured that WhatsApp's anti-advertising philosophy would remain in place.
Apple's efforts to protect its users' privacy was highlighted last month by the Electronic Frontier Foundation, which reported that Apple's iMessage and FaceTime "stood out as the best of the mass-market options."
The EFF specifically noted, in contrast, that Facebook's Messenger and WhatsApp products failed to provide similar end to end encryption, rendering them no more secure than basic email or other competing services similarly lacking Apple's level of security, including Google Chat and Hangouts; Microsoft's Skype; Secret; SnapChat and Yahoo Messenger.
In September, Cook published "Apple's commitment to your privacy," a note that drew attention to the difference between Apple's products and competing ad-centric services that rely on monitoring users' behavior and collecting their data.
"A few years ago," Cook wrote, "users of Internet services began to realize that when an online service is free, you're not the customer. You're the product."
Facebook's defense of its ad-centric business model
Cook's comments appeared to take primary aim at Google and the privacy issues affecting its ad-subsidized offerings including Android. However, Facebook follows Google's same advertising-first business model, resulting in passionate, defensive remarks from its founder.Zuckerberg responded by expressing "frustration" and displaying "irritation" in an interview with Time last week, complaining that "a lot of people increasingly seem to equate an advertising business model with somehow being out of alignment with your customers."
After referring to that idea as "the most ridiculous concept," Zuckerberg responded, "What, you think because you're paying Apple that you're somehow in alignment with them?"
WhatsApp fired shots at ad-centric business models before Cook
The idea that it's better for customers to willingly pay for products they find useful--rather than being allowed to use them for free in exchange for reduced privacy in the form of data collection used to more efficiently and effectively sell ads--was not a concept invented by Cook to polish Apple's hardware sales-oriented business model.In the summer of 2012, WhatsApp founders Jan Koum and Brian Acton published "Why we don't sell ads" on the company's official blog. The post outlined the founders' combined 20 years at Yahoo selling ads, while witnessing Google become even better at selling ads, more efficiently and profitably through better audience targeting.
"When we sat down to start our own thing together three years ago we wanted to make something that wasn't just another ad clearinghouse," Koum wrote.
"Advertising isn't just the disruption of aesthetics, the insults to your intelligence and the interruption of your train of thought" - WhatsApp
"We wanted to spend our time building a service people wanted to use because it worked and saved them money and made their lives better in a small way. We knew that we could charge people directly if we could do all those things. We knew we could do what most people aim to do every day: avoid ads."
Koum then detailed a contempt for ads that made Cook's salvo appear timid in comparison.
"No one wakes up excited to see more advertising, no one goes to sleep thinking about the ads they'll see tomorrow," he wrote, adding, "Advertising isn't just the disruption of aesthetics, the insults to your intelligence and the interruption of your train of thought."
Koum then detailed, "at every company that sells ads, a significant portion of their engineering team spends their day tuning data mining, writing better code to collect all your personal data, upgrading the servers that hold all the data and making sure it's all being logged and collated and sliced and packaged and shipped out... And at the end of the day the result of it all is a slightly different advertising banner in your browser or on your mobile screen."
Then, emphasized with bold highlighting and the white space of existing as its own paragraph on the page, Koum added:
"Remember, when advertising is involved you the user are the product."
He concluded, "at WhatsApp, our engineers spend all their time fixing bugs, adding new features and ironing out all the little intricacies in our task of bringing rich, affordable, reliable messaging to every phone in the world. That's our product and that's our passion. Your data isn't even in the picture. We are simply not interested in any of it."
Koum then asked, "When people ask us why we charge for WhatsApp, we say 'Have you considered the alternative?'"
Facebook paid $22 billion to acquire firm opposed to its ads and data collection
After Facebook announced plans to acquire WhatsApp in February, Koum insisted in a post to users that "nothing" would change for users, stating "you can still count on absolutely no ads interrupting your communication."One month later, Koum posted in March additional comments clarifying that, "if partnering with Facebook meant that we had to change our values, we wouldn't have done it."
He attempted to shut down any speculation that might leave users "thinking we're suddenly collecting all kinds of new data. That's just not true, and it's important to us that you know that," he wrote. "Make no mistake: our future partnership with Facebook will not compromise the vision that brought us to this point."
Zuckerberg's heated charge that it was "the most ridiculous concept" for Cook to be critical of ad-centric products while Apple worked to protect users' privacy is hard to reconcile with the fact that Facebook paid a record amount to buy up a messaging company that expressed the exact same "you are the product" sentiment, particularly given that Zuckerberg ensured that WhatsApp's anti-advertising philosophy would remain in place.
Apple's efforts to protect its users' privacy was highlighted last month by the Electronic Frontier Foundation, which reported that Apple's iMessage and FaceTime "stood out as the best of the mass-market options."
The EFF specifically noted, in contrast, that Facebook's Messenger and WhatsApp products failed to provide similar end to end encryption, rendering them no more secure than basic email or other competing services similarly lacking Apple's level of security, including Google Chat and Hangouts; Microsoft's Skype; Secret; SnapChat and Yahoo Messenger.
Comments
Zuckerberg was already one of my least favorite people in tech (Sheryl Sandberg still beats him) before he mouthed off like this. Now I don't think he's just deluded, he's actually a believer.
Be careful Mark...you're playing with fire. See Nest, Bose, Google Maps, etc.
Last I knew, Whatsapp wouldn't work unless/until the user allowed their entire contact list to be uploaded to the company. Users are still Whatsapp's product, even if ads aren't being thrown at them.
It seems like Zuckerberg has gotten too full of himself to directly attack Apple like that.
He's just jealous of all the talk about Sorkin's new movie.
The EFF specifically noted, in contrast, that Facebook's Messenger and WhatsApp products failed to provide similar end to end encryption...
IIRC shortly after the EFF report was released, Whatsapp made a big todo about their new e2e encryption. Doesn't matter to me, though, because AFAIK they still demand your complete contact list.
Why... the Facebook movie actually got made.
And it generated $225,000,000 worldwide.
Why all the hate towards advertising still? With iAd, everyone here is Apple's product. The difference being that with Apple, you pay for the privilege to be sold to their advertisers.
Why all the hate towards advertising still? With iAd, everyone here is Apple's product. The difference being that with Apple, you pay for the privilege to be sold to their advertisers.
From the article, Apple struggling in iAd sales due to strict privacy policies:
"Apple is struggling to attract advertisers to its iAd network due to its more restrictive privacy policies that limit the amount of customer information shared with advertisers, says a report in AdAge. Apple trails competitors like Google and Facebook, which are more permissive with they data they share. One person familiar with the matter describes Apple as “the best-looking girl at the party, forced to wear a bag over her head” because it has a treasure trove of valuable personal data that it is not willing to share."
iAd is an anomaly for Apple. You can opt out of most tracking, but it's opt in by default. They should just get out of this business altogether.
I think Mark is still sour that Apple didn't want anything to do with the Facebook Skin/ Phone UI he thought was the next big thing.
Pure speculation on my part. @DroidFTW, don't crucify me!
It's nice to read this controversial thoughts between Cook and Zuckerberg but what is really disturbing is that Zuckerberg's concept is working.
Even when you tell people to their face, you are the product the advertisers are the customer they will just reply:"As long as it doesn't cost me money I don't" care!". And there are so many millions of them.
No Facebook in my family but Whatsapp is still getting used by other members of the family
Why all the hate towards advertising still? With iAd, everyone here is Apple's product. The difference being that with Apple, you pay for the privilege to be sold to their advertisers.
Whats an iAd? I have never seen one so I don't know... I think this speaks for itself doesn't it?
It seems like Zuckerberg has gotten too full of himself to directly attack Apple like that. I could maybe understand the other parts of what he said, but calling apple products overpriced is just dumb for a company that DEPENDS on Apple's products for a good portion of it's revenue.
Be careful Mark...you're playing with fire. See Nest, Bose, Google Maps, etc.
I would point to Apple's changing of music and video distribution as a better example of what you seem to be getting at. And Facebook is in a much more vulnerable situation. They are literally only a fad away from being relegated to the status of MySpace or classmates.com.This twat should be beyond any intelligent person taking him seriously in a any way, really.
I'm so pleased you write for AI.
Zuck sucks.
Whats an iAd? I have never seen one so I don't know... I think this speaks for itself doesn't it?
Unfortunately your experience doesn't speak for itself. It's what known as anecdotal evidence and it means very little. I'm sure you're a real important person in your personal and professional life, but the fact that habi on the Apple Insider forum isn't familiar with iAds doesn't mean a whole lot.