WhatsApp founder leaves Facebook over data privacy differences

According to Leifeng.com, according to The Washington Post, WhatsApp co-founder and CEO Jan Koum was recently confirmed to have left Facebook. The reason for Koum's departure was disagreement with Facebook on protecting user data privacy.

After The Washington Post reported that he planned to leave, Koum wrote in a Facebook post: "It is time for me to move on." According to people familiar with the matter, Koum has been informing senior management at Facebook and WhatsApp of his decision. Koum has been rarely seen in WhatsApp's offices in recent months.

In 2009, former Yahoo employees Koum and Acton founded WhatsApp, charging users an annual fee of $0.99. By 2014, the small company had nearly 500 million users. Because Facebook was seeking to expand its social network overseas at the time, it caught Zuckerberg's attention.

After dinner at Zuckerberg's home, Zuckerberg made the offer to WhatsApp that would make Acton and Koum instant billionaires.

Leifeng.com learned that in February 2014, Facebook announced the acquisition of WhatsApp for $19 billion, which set a record for the amount of money acquired by a startup at the time. As of the end of last year, Jan Koum's wealth was about $9.1 billion and Brian Acton's wealth was about $6.7 billion.

But Koum and Acton have been big believers in data privacy and have publicly criticized targeted advertising before. In a 2012 WhatsApp blog post, they wrote: “No one is excited to see more ads; no one anticipates the ads they’ll see tomorrow.” They described online advertising as “a devastation of aesthetics, an insult to the intellect, and an interruption to the train of thought.”

Therefore, maintaining the independence of user data has always been an important part of the three rules that Koum and his co-founder Brian Acton set when selling the company to Facebook. The two founders said in a blog post announcing the acquisition that "WhatsApp will remain autonomous and independent, and you can still trust that absolutely no ads will interfere with your communication."

Just last month, the Facebook user data leak incident broke out, involving as many as 87 million users. The key point of the conflict was that Facebook allowed third parties to incorrectly handle users' personal information.

“Part of Facebook’s success has been its ability to digest information and integrate it into their advertising machine to monetize it,” said Daniel Ives, chief strategy officer and head of technology research at research firm GBH Insights. “But WhatsApp is more challenging because of the resistance of the founders,” he said. “It’s a massive culture clash.”

The two sides clashed over how WhatsApp makes money. Facebook scrapped its $0.99 annual fee, while Koum and Acton continue to oppose the advertising model. The service remains ad-free, but WhatsApp has begun experiments to make money: In January, Facebook launched a tool called WhatsApp Business that allows businesses to create profiles and send messages to their customers on WhatsApp. Facebook's founders also clashed with WhatsApp over building a mobile payment system in India.

Another point of disagreement was WhatsApp’s encryption. In 2016, WhatsApp added end-to-end encryption, a security feature that makes messages inaccessible to outsiders, including WhatsApp’s owners. Facebook executives wanted to make it easier for businesses to use its tools, while WhatsApp executives argued that doing so would require weakening its encryption.

Despite the privacy concerns of WhatsApp’s founders, the company’s founders have been reluctant to keep their users’ data private. Facebook forced WhatsApp to change its terms of service, giving the social network access to WhatsApp users’ phone numbers, and also pushed for consistent user profiles across Facebook and WhatsApp for data mining and ad targeting and recommendation systems.

WhatsApp executives are willing to share some data with Facebook to measure who is using the service, according to people familiar with the matter. But they object to using WhatsApp data to create a unified user profile across Facebook's multiple platforms, including Instagram and Facebook Messenger, that could be used for ad targeting or data mining by Facebook.

Eventually, Koum became consumed by the philosophical differences, the people said. Four years and one month after the Facebook acquisition, other WhatsApp employees were demoralized and planned to leave in November, when they could exercise all their stock options under the terms of the Facebook deal, according to other people.

According to Leifeng.com, Acton, another WhatsApp founder who had previously left, donated $50 million to Signal, an encrypted instant messaging app. In a recent blog post, he announced that he is the executive chairman of the nonprofit Signal Foundation and said his goal is to build "the most trusted communication experience on the planet."