Facebook Inc (NASDAQ:FB) made plenty of headlines when it doled out billions to buy WhatsApp, and as it turns out, WhatsApp follows the same philosophy Facebook CEO Mark Zuckerberg criticized last week. Zuckerberg was responding to comments made by Apple Inc. (NASDAQ:AAPL) CEO in September when he wrote something on his company’s privacy practices.
Apple versus Facebook
Cook said in his article titled “Apple’s commitment to your privacy” that online services that are free for users and instead focused on ads turn their users into products rather than customers. He said this is because these free services, including Facebook and Google Inc (NASDAQ:GOOGL) (NASDAQ:GOOG) make money by monitoring user behavior and collecting data to sell to marketers.
Numerous news headlines have trumpeted major concerns about inflation, which has been at 40-year highs. But how should investors handle inflation as it pertains to their portfolios? At the Morningstar Investment Conference on Monday, Kevin Dreyer, co-CIO of Gabelli Funds, outlined some guidelines for investing in the age of inflation. Historic inflation Dreyer started by Read More
At the time Cook made the comments, it appeared as if he was primarily targeting Google, which has been criticized in the past for privacy issues in connection with its ad-focused services. Of course Facebook follows the same model, and Zuckerberg took offense to the comments—even though his company didn’t think it was such a bad idea to pay billions for a company that follows the same business strategy and philosophy as Apple.
Apple’s philosophy the “most ridiculous concept”
Zuckerberg called Cook’s comments “the most ridiculous concept,” adding, “What, you think because you’re paying Apple that you’re somehow in alignment with them?”
According to Apple Insider though, Apple’s CEO wasn’t the first to make comments deriding Facebook’s and Google’s ad-centric business model. WhatsApp’s co-founders made similar comments before Facebook made an offer to buy it. Their comments came in an article called “Why we don’t sell ads” posted on the company’s blog. And what they said makes Cook’s comments seem pretty tame in comparison.
Cook echoes WhatsApp co-founders
“No one wakes up excited to see more advertising,” they wrote. “No one goes to sleep thinking about the ads they’ll see tomorrow. Advertising isn’t just the disruption of aesthetics, the insults to your intelligence and the interruption of your train of thought.”
They said all companies that offer ad-based services have an engineering team that’s focused on mining data and improving code that’s designed to collect users’ data. Additionally, they said the only thing that’s different is that the ad banner users see might be slightly different based on the information the company has collected about them.
As it turns out, it seems like Cook essentially stole (or at least borrowed anyway) the WhatsApp cofounders’ point of view from 2012. They wrote: “Remember, when advertising is involved you the user are the product.” That’s right. It’s nearly exactly the same words Cook wrote in September. They added that WhatsApp’s engineers are focused on making the product great rather than on collecting data.
WhatsApp hates ads… but Facebook bought it anyway
In February, Facebook revealed plans to acquire WhatsApp, and Jan Koum, one of the messaging app’s two co-founders, said nothing would be changing at the company after Facebook closed the deal. He said they wouldn’t have struck a deal if being acquired by the social network meant they had to change their values.
It was noted earlier this year that Facebook’s company culture clashes with WhatsApp’s culture, and apparently this is yet another example of how different the two companies are. Zuckerberg reassured WhatsApp users that they wouldn’t be imposing their advertising model onto the messaging app, so it makes his recent comments against WhatsApp’s business model seem pretty strange.
Why would a CEO speak so harshly against a business model part of his own company follows?