WhatsApp co-founder Brian Acton has admitted he may have forfeited users’ privacy when he agreed to let Facebook acquire the popular messaging app for $19 billion.
In a wide-ranging and candid interview, Acton explained to Forbes why he left $850 million on the table when he abruptly exited Facebook in 2017, three years after it acquired WhatsApp.
The interview comes days after Instagram co-founders Kevin Systrom and Mike Krieger announced they would resign from the company to ‘explore our curiosity and creativity again.’
Several reports said friction with Zuckerberg had caused the departures.
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Ultimately, Acton’s decision to leave rested on heated disagreements between him and Facebook CEO Mark Zuckerberg and COO Sheryl Sandberg over monetizing the app, he claims.
Zuckerberg and Sandberg wanted to show targeted advertisements in WhatsApp and enable businesses to communicate with users in direct messages – both of which Acton strongly disagreed with, given WhatsApp’s core functionality of end-to-end encryption.
Acton believed Facebook would never abandon its plans to monetize WhatsApp and felt he had no choice but to leave.
‘At the end of the day, I sold my company,’ Acton told Forbes. ‘I sold my users’ privacy to a larger benefit. I made a choice and a compromise. I live with that every day.
‘…I am a sellout. I acknowledge that,’ Acton added.
Acton’s grievances with the company that made him a billionaire first became apparent earlier this year when, in the midst of the Cambridge Analytica scandal, he tweeted: ‘It is time. #deletefacebook.’
While Acton was at Facebook, he had fiery standoffs with Zuckerberg and Sandberg over the discussions around monetizing WhatsApp.
WhatsApp’s end-to-end encryption stood in the way, and Facebook managers questioned and probed ways to offer businesses analytical insights on WhatsApp users while keeping the encrypted environment.
The report said Acton had proposed monetizing WhatsApp through a metered-user model, charging users after a certain large number of free messages were used up.
His plans were shot down by Sandberg, who said ‘It won’t scale’.
In one meeting, Acton confronted Zuckerberg and said it was clear that the company intended to implement ads on WhatsApp.
Zuckerberg reportedly responded: ‘This is probably the last time you’ll ever talk to me,’ according to Acton.
Acton grew gradually uncomfortable with Facebook’s approach to making money, describing it as ‘if it made us a buck, we’d do it.’
While he asserts that Facebook ‘isn’t the bad guy’ and that they’re ‘just very good businesspeople,’ he ended up walking away from Facebook.
All Acton had to do was stay at Facebook one more year to claim his final set of stock grants, but he said he couldn’t.
WHO IS BRIAN ACTON AND WHAT HAS HE DONE?
Brian Acton is the founder of WhatsApp which was acquired by Facebook for $19 billion (£11.4 billion) in 2014 – the largest deal in Facebook’s history.
According to Forbes, Acton held over 20 per cent stake in the company, making him worth around $3.8 billion (£2.7 billion).
Following Facebook’s acquisition of WhatsApp, Acton donated nearly $290 million (£206 million) to the Silicon Valley Community Foundation.
The foundation commissions research and partners donors with non-profit organisations.
Acton is now believed to be worth $5.5 billion (£3.9 billion) and works at Signal Foundation, which he founded earlier this year.
The aim of the non-profit organisation is ‘to develop open source privacy technology that protects free expression and enables secure global communication.’
Back in 1996, Acton was the 44th employee hired by Yahoo as an infrastructural engineer.
For the following nine years he worked at Yahoo and lost millions in the dot-com bubble in 2000.
According to his Twitter he was turned down for a job at Facebook in 2009 and also spent a year travelling.
In the same year he bought an iPhone and decided the App Store – which at the time had only been around for seven months – was going to rapidly expand.
Him and his colleague from Yahoo, Jan Koum, decided they wanted to create something.
Koum reputedly came up with the name WhatsApp because it sounded like ‘what’s up?’
Just one week after he decided he wanted to create the app, he incorporated WhatsApp in California.
Now the company is one of the biggest mobile messaging apps with 1.3 billion active monthly users.
‘It was like, well, you want to do these things I don’t want to do,’ Acton told Forbes. ‘It’s better if I get out of your way. And I did.’
The decision ended up costing him $850 million because his final stock options hadn’t vested yet.
WhatsApp intends to put ads in its Status feature starting next year, but said ‘messages will remain end-to-end encrypted. There are no plans to change that,’ according to Forbes.
Meanwhile, Acton’s co-founder, Jan Koum, left the company in April, which meant Koum could claim his final stock grants.
Facebook did not immediately respond to a request for comment on the Forbes report.
WHAT IS THE CAMBRIDGE ANALYTICA SCANDAL?
Communications firm Cambridge Analytica has offices in London, New York, Washington, as well as Brazil and Malaysia.
The company boasts it can ‘find your voters and move them to action’ through data-driven campaigns and a team that includes data scientists and behavioural psychologists.
‘Within the United States alone, we have played a pivotal role in winning presidential races as well as congressional and state elections,’ with data on more than 230 million American voters, Cambridge Analytica claims on its website.
The company profited from a feature that meant apps could ask for permission to access your own data as well as the data of all your Facebook friends.
This meant the company was able to mine the information of 87 million Facebook users even though just 270,000 people gave them permission to do so.
This was designed to help them create software that can predict and influence voters’ choices at the ballot box.
The data firm suspended its chief executive, Alexander Nix, after recordings emerged of him making a series of controversial claims, including boasts that Cambridge Analytica had a pivotal role in the election of Donald Trump.
This information is said to have been used to help the Brexit campaign in the UK.