Every
business or even not-for-profit organizations have costs associated with activities
they do. Businesses having primary focus on providing information, entertainment,
or other services, such as, social networking (E.g. Facebook), blogging (Blogger),
micro-blogging (Twitter) also have huge
costs. There are generally three ways in which such firms usually cover-up their
costs and earn profits. The money can be raised either through advertising
(selling ads), or through subscription based fee (Watssapp) or through
donations (Wikipedia). Often, many businesses use more than one way to raise their
top-line. Selling ads is however the most widely used
method, probably as its most acceptable to users. How many of us would really be willing to pay
even half a dollar (Rs. 30) to watch the latest song of YoYo on Youtube, not
many. However, we would not mind if we are shown a 29 second ad, without an
option to skip, before the song starts.
Therefore,
advertising becomes the backbone of such businesses. These businesses do whatever
it takes to get more and more advertisers and more advertising money from every
advertiser. This often requires them to target the customer more precisely, and
thus they try to enter more and more into our life. This is a very critical
topic, so we will talk about it sometime later. Facebook and Google are the
biggest companies in this sphere.
Different Revenue Models for Content/Platform Providers
WhatsApp,
is one such successful* business whose founders, Brian Acton and Jan Koum have
however looked down at advertising based revenue model and criticized it. Now
that WhatsApp is a facebook property, we may see changes in its revenue model
in future.
However,
I’d like you read this wonderful note, Brian and Jan motivate you to read,
while they ask you to pay $1 for WhatsApp yearly subscription.
“Advertising
has us chasing cars and clothes, working jobs we hate so we can buy shit we
don’t need.” –
Tyler Durden, Fight Club
Brian
and I spent a combined 20 years at Yahoo!, working hard to keep the site
working. And yes, working hard to sell ads, because that's what Yahoo! did. It
gathered data and it served pages and it sold ads.
We
watched Yahoo! get eclipsed in size and reach by Google... a more efficient and
more profitable ad seller. They knew what you were searching for, so they could
gather your data more efficiently and sell better ads.
These
days companies know literally everything about you, your friends, your
interests, and they use it all to sell ads.
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. 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.
No
one wakes up excited to see more advertising, no one goes to sleep
thinking about the ads they'll see tomorrow. We know people go to sleep excited
about who they chatted with that day (and disappointed about who they didn't).
We want WhatsApp to be the product that keeps you awake... and that you reach
for in the morning. No one jumps up from a nap and runs to see an
advertisement.
Advertising
isn't just the disruption of aesthetics, the insults to your intelligence and
the interruption of your train of thought. 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. Remember,
when advertising is involved you the user are the product.
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.
When
people ask us why we charge for WhatsApp, we say "Have you considered the
alternative?"
The above article has been sourced from: http://blog.whatsapp.com/245/Why-we-dont-sell-ads
*I consider WhatsApp successful
because its founders were able to sell this business at a whopping US$19
billion to Facebook.
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