No Such Thing As A Free Lunch (Or App) – Understanding The Price Of “Free”
Prior to the acquisition by Facebook, WhatsApp was charging users a $0.99 yearly fee which, with hundreds of millions of users across the globe, appeared to be a viable, albeit modest, business model. As privacy advocates, the WhatsApp co-founders Jan Koum and Brian Acton preferred to generate revenue by charging a very nominal fee to enable users around the world to communicate privately. By doing this, they avoided having to aggregate and sell user information to advertisers – a common business model of “free” apps.
What’s Up With WhatsApp?
In 2014, WhatsApp had close to 500 million users worldwide. Mark Zuckerberg, Facebook’s founder and CEO, took notice of such a large global user base as he looked to expand Facebook’s overseas footprint. Facebook moved quickly to acquire the startup, however Koum and Acton were concerned about a potential culture clash between the two organizations because of the distinctly different business models and focus on privacy. Anxious to finalize the deal, Facebook assured them that data would never be shared between the two applications and WhatsApp would be allowed to operate independently. Having made these assurances, Facebook acquired WhatsApp, a company with less than $20 million in revenue from the 99-cent fees, for a record $19 billion.
Within eighteen months, Facebook was facing pressure to justify the large price tag of acquiring WhatsApp, and recognized they would need to start collecting user data so that it could be monetized. Facebook absolved the assurances it had provided and pushed WhatsApp to change their terms of service to allow Facebook to have access to users’ phone numbers and other data – including devices and operating systems. Facebook continued to push the WhatsApp founders for more user information, ultimately leading to the disappointment, disillusionment, and eventual departure of Koum and Acton.
How ‘Free’ Is Free?
Regardless of what apps and services advertise, they are in business to make money. Every app and service has a business model which articulates exactly how they return value to investors. So, if an app isn’t explicitly charging fees, it must be generating value through some other means. In most cases, the value they are returning to investors is at the expense of their users’ privacy – something that many argue is worth more than money.
There are many popular applications and mobile apps that do not charge a subscription fee – Gmail, Facebook, and Twitter to name just a few. In most cases, the users are the product and revenue is generated by collecting and selling user data to advertisers.
Free Doesn’t Mean No-Cost
The reality is that nothing is free, including our privacy. Apps and services have to generate revenue and return value to their investors, and that means they are monetizing something – in many cases, they are monetizing us, their user base. The only way to ensure your privacy is by using paid services that aren’t motivated to monetize you to generate revenue.
Calls and text messages can include some of our most personal and private information – data that we wouldn’t want shared with anyone other than those we intend to share it with. That’s why it is so important to choose a call and messaging platform where meaningful interactions are enabled with frustration-free performance, end-to-end encryption, and the assurance that user data is never aggregated, shared, or monetized.
For a small monthly fee, TrustCall provides secure encrypted end-to-end calls and text. Using TrustCall, your communications, including the metadata, are never collected, mined, or shared in any way. Try it and see how you easy it is to secure your calls and texts – without giving up your privacy.