What’s that? That’s just the sound of Facebook Inc (NASDAQ:FB) tearing up the privacy agreement of WhatsApp’s billion users, allowing businesses to invade user inboxes.
Specifically, WhatsApp is going to share users’ phone numbers, device information and metadata with Facebook. FB has said the reason for doing this is to improve advertising on the social network and to improve friend suggestions through phone contacts.
The change to WhatsApp’s privacy policy means businesses can message individual users to market to them, and also reach them with targeted ads throughout the “Facebook family.”
From the blog post announcing the change:
“We want to explore ways for you to communicate with businesses that matter to you too, while still giving you an experience without third-party banner ads and spam. Whether it’s hearing from your bank about a potentially fraudulent transaction, or getting notified by an airline about a delayed flight …”
What This Means for FB Stock
This is Facebook’s first attempt at monetizing the popular WhatsApp service since buying the company for $19 billion two years ago, and people aren’t too pleased with it.
FB stock was up about three-fourths of a percent over the past day on the news, but began trending lower after it was announced that the U.K. Information Commissioner is investigating Facebook and WhatsApp for breaching its promise to users. Information Commissioner Elizabeth Denham had this to say:
“Our role is to pull back the curtain on things like this, ensuring that companies are being transparent with the public about how their personal data is being shared and protecting consumers by making sure the law is being followed.”
This is a move that users probably should’ve seen coming, as Facebook did away with the $1 annual fee for WhatsApp and made it completely free. In fact, in a blog post dated Jan. 18, WhatsApp telegraphed its intent to bring business messaging into the fray.
While users are upset now, that’s the typical response to any changes made by a social network. Users will get over it, re-install their apps and fall in line with the gargantuan Facebook advertising machine.
As of this writing, John Kilhefner did not hold a position in any of the aforementioned securities.
