Facebook to tap WhatsApp user data

The WhatsApp application displayed on an iPhone.
The WhatsApp application displayed on an iPhone. PHOTO: AFP

SAN FRANCISCO • Facebook is laying the groundwork for its free messaging service WhatsApp to begin making money, easing its privacy rules so data can be used for Facebook advertising and allowing businesses to message its more than one billion users.

This is Facebook's first step towards monetising the platform since chief executive Mark Zuckerberg paid US$22 billion (S$29.7 billion) for the app in 2014.

WhatsApp yesterday announced the change to its terms of service policy. The move allows businesses to communicate with users through, for instance, appointment reminders, delivery and shipping notifications, and marketing pitches. In a corresponding blog post, WhatsApp said it would be testing the features over the coming months.

The policy shift might help it generate revenue, but could irk users drawn to its strong stance on privacy. After it agreed to be purchased by Facebook in 2014, co-founder Jan Koum pledged that the deal would not change how WhatsApp handled user data.

 

Now it says it will start sharing more information about customers with the "Facebook family". The data, including phone numbers, could be used to better target ads when users are browsing Facebook or Instagram, WhatsApp said.

Facebook initially agreed to buy WhatsApp for US$19 billion, but the deal price rose to US$22 billion because of the social network's rising stock price.

Investors have been keen to see how Mr Zuckerberg makes money from the deal. Several services in Asia, especially WeChat in China, have successfully opened up their platforms so businesses can interact with customers.

The strategy is one that Facebook has also been taking with the Messenger communication app.

In its blog post, WhatsApp reiterated its commitment to encryption, saying no outside parties are able to see what users are saying to one another. The policy has put it at odds with government authorities in the United States and Europe who want an ability to intercept the communication of potential terrorists.

"Our belief in the value of private communications is unshakeable," the company said.

Facebook shares have gained almost 20 per cent this year.

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A version of this article appeared in the print edition of The Straits Times on August 27, 2016, with the headline 'Facebook to tap WhatsApp user data'. Print Edition | Subscribe