WhatsApp

Open sourcing analysis, plus US, China and HQ2

Posted by | Amazon, Asia, Government, hq2, Mobile, new york city, oppo, Tencent, washington DC, WeChat, WhatsApp, Xiaomi | No Comments

The big news today is that — finally — we have Amazon’s selection of cities for its dual second headquarters (Northern Virginia and NYC). Then some notes on China. But first, semiconductors and open sourcing analysis.

We are experimenting with new content forms at TechCrunch. This is a rough draft of something new — provide your feedback directly to the authors: Danny at danny@techcrunch.com or Arman at Arman.Tabatabai@techcrunch.com if you like or hate something here.

Pivot: Future of semiconductors, chips, AI, etc.

Last week, I focused on SoftBank’s debt and Form D filings by startups. On Friday, I asked what I should start to analyze next. There were several feedback hotspots, but the one that popped out to me was around next-generation chips and the battle for dominance at the hardware layer.

As a software engineer, I know almost nothing about silicon (the beauty of abstraction). But it is clear that the future of all kinds of workflows will increasingly be driven by capabilities at the hardware/silicon level, particularly in future applications like artificial intelligence, machine learning, AR/VR, autonomous driving and more. Furthermore, China and other countries are spending billions to go after the leaders in this space, such as Nvidia and Intel. Startups, funding, competition, geopolitics — we’ve got it all here.

Arman and I are now diving deeper into this space. We will start to post once we have some interesting things to share, but if you have ideas, opinions, companies or investments in this space: tell us about them, as we are all ears: danny@techcrunch.com and Arman.tabatabai@techcrunch.com.

Open-source analysis at TechCrunch

Since I launched this daily “column” last week, I have included the text near the top that “We are experimenting with new content forms at TechCrunch.” One of those forms is what might be called open-source journalism. Definitions are fuzzy, but I take it to mean working “in the open” — allowing you, the audience of this column, to engage in not just feedback around finalized and published posts, but to actually affect the entire process of analysis, from sourcing and ideation to data science and writing.

I am thankful to work at a publication like TechCrunch where my readers are often working in the exact sectors that I am writing about. When I wrote about Form Ds last week, a number of startup attorneys reached out with their own thoughts and analysis, and also explained key aspects of how the law is changing around SEC disclosure for startups. That’s really powerful, and I want to apply it to as many fields as possible.

This thesis is ultimately intentional — now I have to operationalize it. There aren’t good tools (yet!) that I know of that allow for easy sharing of data and notes that don’t rely on a hacked-together set of Google Docs and GitHub. But I’m exploring the stack, and will publish more things publicly as we have them.

Amazon HQ2 — the future of corporate relations with cities

Amazon’s long process for selecting an HQ2 is finally over, and the official answer is two: Northern Virginia and NYC. Tons of words have been spilled about the search, and I am sure even more analysis will strike today about what put those two locations over the top.

To me, the key for mayors is to start using these reverse searches (where a company seeks a city and not vice versa) as leverage to actually get resources to fund infrastructure and other critical services.

This is a theme that I discussed about a year ago:

Take Boston’s bid for GE’s new headquarters. Yes, the city offered property tax rebates of about $25 million , but GE’s move also pushed the state to fund a variety of infrastructure improvements, including the Northern Avenue bridge and new bike lanes. That bridge adds a critical path for vehicles and pedestrians in Boston’s central business district, yet has gone unfunded for years.

Ideally, governments could debate, vote, and then fund these sorts of infrastructure projects and community improvements. The reality is that without a time-sensitive forcing function like a reverse RFP process, there is little hope that cities and states will make progress on these sorts of projects. The debates can literally go on forever in American democracy.

So if you are a mayor or economic planning official, use these processes as tools to get stuff done. Use the allure of new jobs and tax revenues to spur infrastructure spending and get a rezoning through a recalcitrant city council. Use that “prosperity bomb” to upgrade old parts of the urban landscape and prepare the city for the future. A healthier, more humane city can be just around the corner.

Take DC. The city has seen one of the best-run Metro systems deteriorate to abysmal levels over the past few years due to a complete dumpster fire of organizational design (the DC transit agency WMATA is funded by inconsistent revenue sources that ensure it will never be sustainable). Here is an opportunity to use Amazon’s announcement to get the tax framework and operations figured out to ensure that real estate, transportation and other critical urban infrastructure are designed effectively.

China’s mobile internationalization

Timothy Allen/Getty Images

Talking about second headquarters, the technology industry clearly has separated into poles, one based around the United States and the other based around China. Two articles I read recently gave good insights of the benefits and challenges for China in this world.

The first is from Sam Byford writing at The Verge, who investigates the native OS options that Chinese consumers receive from companies like Xiaomi, Huawei, Oppo and others. The headline is much more shrill than the text, so don’t let that frighten you.

Byford provides an overview of the lineage of Chinese mobile OSes, and also notes that what might look like design gaffes in Western consumer eyes might be critical needs for Chinese buyers:

But what is true today is that not all Chinese phone software is bad. And when it is bad from a Western perspective, it’s often bad for very different reasons than the bad Android skins of the past. Yes, many of these phones make similar mistakes with overbearing UI decisions — hello, Huawei — and yes, it’s easy to mock some designs for their obvious thrall to iOS. But these are phones created in a very different context to Android devices as we’ve previously understood them.

The article is perhaps a tad long for what it is, but Byford’s key viewpoint should be repeated as a mantra by any person connected to the technology sector today: “The Chinese phone market is a spiraling behemoth of innovation and audacity, unlike anything we’ve ever seen. If you want to be on board with the already exciting hardware, it’s worth trying to understand the software.”

Of course, while China may be a huge country, its leading technology companies do want to globalize and expand their user bases outside of the Middle Kingdom’s borders. That may well be a challenging proposition.

Writing at Factor Daily, Shadma Shaikh dives into the failure of WeChat to break into the Indian market. The product lessons learned by WeChat’s owner Tencent could be applied to any Silicon Valley company — cultural knowledge and appropriate product design are key to entering overseas markets.

Shaikh gives a couple of examples:

Another design feature in the app allowed users to look up and send add-friend requests to WeChat users nearby. During initial onboarding when users were just checking app’s features, many would tap the “people nearby” feature, which would switch on location sharing by default – including with strangers. Once location sharing with strangers was switched on, it wasn’t very intuitive to turn it off.

“Women used to get a lot of unwarranted messages from men, which was a major turn off and many of them left the platform,” Gupta says. “China probably didn’t have this stalking problem.”

And

In China, where the internet was cheaper than in India in 2012, sending video files of, say, 4 MB was not a challenge. WhatsApp compresses a 5 MB photo to 40 kilobytes. WeChat did not compress the files and took many minutes and data to send and receive media files.

Internationalization will never be easy, but the lessons that Silicon Valley has slowly learned over the past two decades will need to be learned again by Chinese companies if they want to export their software to other countries.

Reading Docket

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Zuckerberg says the future is sharing via 100B messages & 1B Stories/day

Posted by | Advertising Tech, Apps, Facebook, Facebook Earnings, Facebook Earnings Q3 2018, facebook messenger, Facebook Stories, instagram, Media, Mobile, Snapchat, Social, TC, Video, WhatsApp | No Comments

The News Feed won’t sustain Facebook forever, and that’s scaring investors. Today on Facebook’s earnings call, Mark Zuckerberg stressed that sharing is shifting to private chat, where people send 100 billion messages per day on Facebook’s family of apps, and Stories, where he says people share 1 billion of these slideshows per day (though it’s unclear if that includes third-party apps like Snapchat).

But that means Facebook will have to realign its business towards these mediums where monetization is more complex and it has less experience. The result of Zuckerberg’s comments was a reversal of Facebook’s initial 2 percent share price gain after earnings were announced that dragged it down to a 3.5 percent loss. That was only reversed when Zuckerberg said Facebook would reduce limits on video advertising, pushing shares up 3 percent in after-hours trading.

Facebook’s year-over-year revenue growth has already slowed from 59 percent in Q3 2016, to 49 percent a year ago, to 33 percent now as Zuckerberg admits it’s hitting saturation in developed markets, plus it’s running out of News Feed space. Now it will both have to deal with the sharing medium shift, and that the new users it’s adding in the Asia-Pacific and Rest Of World regions earn it 10X less than users in North America.

Battling iMessage

In messaging, Zuckerberg says “People share more photos, videos, and links on WhatsApp and Messenger than they do on social networks.” He sees Facebook’s position as strong, saying “We’re leading in most countries”, though that’s mostly in the developing world Android market where people choose their own default messaging app. “Our biggest competitor by far is iMessage. In important countries like the US where the iPhone is strong, Apple bundles iMesssage as the default texting app, and it’s still ahead” Zuckerberg notes.

The “bundled” language harkens back to to antitrust lawsuits against Microsoft for bundling computers with Internet Explorer. With Apple CEO Tim Cook constantly harping on the poor privacy practices of ad-supported companies like Facebook, Zuckerberg might be gunning to draw regulator attention to iMessage.

Facebook is starting to more aggressively monetize Messenger through inbox ads, and its now selling enterprise tools to brands on both Facebook and WhatsApp that let them pay to ping users. But Facebook risks its chat apps seeming annoying or intrusive if it packs in too many ads or allows too much Message spam. Users could stray to status quos like iMessage and Android Messages if it puts monetization above the user experience.

Dominating Snapchat

On Stories, Zuckerberg says Facebook is doing even better. Over 1 billion people use its Stories features across Facebook, Messenger, Instagram, and WhatsApp each day, compared to 186 million daily users on Stories inventor Snapchat as a whole. Stories are where the majority of Facebook sharing growth is happening, and Facebook Stories are gaining momentum after a slow and buggy start. That’s why Zuckerberg never mentioned Snapchat, and instead talk about YouTube as its primary competitor in video.

The problem is that creating attractive video ads, especially vertical full-screen ones for Stories, is beyond the capability of the long-tail on small businesses that have fueled Facebook’s News Feed ad revenue. Users often rapidly skip through Stories ads, and Facebook currently doesn’t offer unskippable ones like Snapchat. Many people don’t think to tap or swipe up to visit a link from a Story, or simply don’t want to lose their place in ways that didn’t happen on desktop or even mobile feed ads.

Chasing YouTube

Beyond Stories, Facebook salvaged its after-hours share price by discussing how it plans to show more video, and therefore more of its lucrative video ads. Back in January, Facebook admitted its Q4 user count had declined and revenue might stumble in part because it had decided to show people fewer viral videos that they watch passively. This came as part of its drive for Time Well Spent. But now, Zuckerberg says that Facebook has cracked the code for how to make passive video consumption a positive experience, so Facebook will lift some limits:

People really want to watch a lot of video. To a large degree we’ve had to rate limit its growth, and we need to do the things so we can stop limiting it. The things that have caused us to limit it are on the one hand, when we see passive consumption of video displacing social interactions . . . We needed to figure out a way that video can grow but people can also keep on interacting and doing what they tell us that they uniquely want from Facebook. And now I think we’re starting to work through what the formula is going to be so we can take some of those rate limits off and let video grow at the rate that it wants to. I feel that that’s a very exciting opportunity ahead.”

Across Facebook’s other products, Zuckerberg noted that 800 million people now use Marketplace, its Jobs feature have helped people find 1 million jobs, and its birthday fundraisers have raised $300 million alone this year. But it will be teaching advertisers how to effectively create sponsored messages and Stories ads that will define whether Facebook’s revenue keeps growing.

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WhatsApp is finally adding stickers

Posted by | Android, Apps, Brian Acton, computing, Facebook, Jan Koum, social media, social network, Software, sticker, WhatsApp | No Comments

WhatsApp is finally adding stickers to its hugely popular messaging app. The company said today that support for stickers will roll out to Android and iOS users over “the coming weeks.”

Initially, the app’s 1.5 billion users will have a seemingly limited selection with the first packs provided by WhatsApp’s own design team and some “other artists” chosen by the company.

However, that’s likely to change in the future since WhatsApp will allow anyone to add stickers that can be used inside the app.

It’s taking an interesting route to enabling that. Would-be sticker artists will need to publish their packs as an app on the Google Play or Apple App Store. From there, users can download the apps and then make use of the packs inside WhatsApp. The company has provided a template that it claims requires “minimal development or coding experience.”

A full guide on the sticker submission process can be found here.

Other messaging apps have taken a different approach.

Line — which pioneered the concept of stickers — takes a very curated approach, with sticker packs approved by the company itself. That walled garden approach has helped it curate the best selection of stickers, many of which are paid. That’s nothing to be scoffed as since Line makes hundreds of millions of dollars from sticker purchases every year.

Telegram has the most open sticker platform. Anyone can make and publish stickers in just minutes, but that leads to its own problems such as plagiarism and differing levels of quality.

Either way, WhatsApp’s move into stickers is very much a Facebook -led move.

The service’s founders — Jan Koum and Brian Acton — have both left the social network under controversial terms, at least according to Acton himself.

Prior to the acquisition deal, both men were very vocally opposed to advertising, games and other functions. They deemed them trivial and believed that they detracted from the core focus of WhatsApp: simple and fast messaging.

At this point, their ethical ship has long since sailed with Facebook introducing features like a business service and ad integrations with Facebook, while there are plans to roll out payments and other features that Koum and Acton would no doubt have railed against. It’s enough to make you vomit over the side of your yacht in the Mediterranean.

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Facebook’s ex-CSO, Alex Stamos, defends its decision to inject ads in WhatsApp

Posted by | Advertising Tech, Alex Stamos, Android, Apple, Apps, Brian Acton, e2e encryption, encryption, Facebook, Instant Messaging, Jan Koum, privacy, Sheryl Sandberg, signal foundation, Signal Protocol, Social, social media, WhatsApp | No Comments

Alex Stamos, Facebook’s former chief security officer, who left the company this summer to take up a role in academia, has made a contribution to what’s sometimes couched as a debate about how to monetize (and thus sustain) commercial end-to-end encrypted messaging platforms in order that the privacy benefits they otherwise offer can be as widely spread as possible.

Stamos made the comments via Twitter, where he said he was indirectly responding to the fallout from a Forbes interview with WhatsApp co-founder Brian Acton — in which Acton hit at out at his former employer for being greedy in its approach to generating revenue off of the famously anti-ads messaging platform.

Both WhatsApp founders’ exits from Facebook has been blamed on disagreements over monetization. (Jan Koum left some months after Acton.)

In the interview, Acton said he suggested Facebook management apply a simple business model atop WhatsApp, such as metered messaging for all users after a set number of free messages. But that management pushed back — with Facebook COO Sheryl Sandberg telling him they needed a monetization method that generates greater revenue “scale”.

And while Stamos has avoided making critical remarks about Acton (unlike some current Facebook staffers), he clearly wants to lend his weight to the notion that some kind of trade-off is necessary in order for end-to-end encryption to be commercially viable (and thus for the greater good (of messaging privacy) to prevail); and therefore his tacit support to Facebook and its approach to making money off of a robustly encrypted platform.

Stamos’ own departure from the fb mothership was hardly under such acrimonious terms as Acton, though he has had his own disagreements with the leadership team — as set out in a memo he sent earlier this year that was obtained by BuzzFeed. So his support for Facebook combining e2e and ads perhaps counts for something, though isn’t really surprising given the seat he occupied at the company for several years, and his always fierce defence of WhatsApp encryption.

(Another characteristic concern that also surfaces in Stamos’ Twitter thread is the need to keep the technology legal, in the face of government attempts to backdoor encryption, which he says will require “accepting the inevitable downsides of giving people unfettered communications”.)

I don’t want to weigh into the personal side of the WhatsApp vs Facebook fight, as there are people I respect on both sides, but I do want to use this as an opportunity to talk about the future of end-to-end encryption. (1/13)

— Alex Stamos (@alexstamos) September 26, 2018

This summer Facebook confirmed that, from next year, ads will be injected into WhatsApp statuses (aka the app’s Stories clone). So it is indeed bringing ads to the famously anti-ads messaging platform.

For several years the company has also been moving towards positioning WhatsApp as a business messaging platform to connect companies with potential customers — and it says it plans to meter those messages, also from next year.

So there are two strands to its revenue generating playbook atop WhatsApp’s e2e encrypted messaging platform. Both with knock-on impacts on privacy, given Facebook targets ads and marketing content by profiling users by harvesting their personal data.

This means that while WhatsApp’s e2e encryption means Facebook literally cannot read WhatsApp users’ messages, it is ‘circumventing’ the technology (for ad-targeting purposes) by linking accounts across different services it owns — using people’s digital identities across its product portfolio (and beyond) as a sort of ‘trojan horse’ to negate the messaging privacy it affords them on WhatsApp.

Facebook is using different technical methods (including the very low-tech method of phone number matching) to link WhatsApp user and Facebook accounts. Once it’s been able to match a Facebook user to a WhatsApp account it can then connect what’s very likely to be a well fleshed out Facebook profile with a WhatsApp account that nonetheless contains messages it can’t read. So it’s both respecting and eroding user privacy.

This approach means Facebook can carry out its ad targeting activities across both messaging platforms (as it will from next year). And do so without having to literally read messages being sent by WhatsApp users.

As trade offs go, it’s a clearly a big one — and one that’s got Facebook into regulatory trouble in Europe.

It is also, at least in Stamos’ view, a trade off that’s worth it for the ‘greater good’ of message content remaining strongly encrypted and therefore unreadable. Even if Facebook now knows pretty much everything about the sender, and can access any unencrypted messages they sent using its other social products.

In his Twitter thread Stamos argues that “if we want that right to be extended to people around the world, that means that E2E encryption needs to be deployed inside of multi-billion user platforms”, which he says means: “We need to find a sustainable business model for professionally-run E2E encrypted communication platforms.”

On the sustainable business model front he argues that two models “currently fit the bill” — either Apple’s iMessage or Facebook-owned WhatsApp. Though he doesn’t go into any detail on why he believes only those two are sustainable.

He does say he’s discounting the Acton-backed alternative, Signal, which now operates via a not-for-profit (the Signal Foundation) — suggesting that rival messaging app is “unlikely to hit 1B users”.

In passing he also throws it out there that Signal is “subsidized, indirectly, by FB ads” — i.e. because Facebook pays a licensing fee for use of the underlying Signal Protocol used to power WhatsApp’s e2e encryption. (So his slightly shade-throwing subtext is that privacy purists are still benefiting from a Facebook sugardaddy.)

Then he gets to the meat of his argument in defence of Facebook-owned (and monetized) WhatsApp — pointing out that Apple’s sustainable business model does not reach every mobile user, given its hardware is priced at a premium. Whereas WhatsApp running on a cheap Android handset ($50 or, perhaps even $30 in future) can.

Other encrypted messaging apps can also of course run on Android but presumably Stamos would argue they’re not professionally run.

“I think it is easy to underestimate how radical WhatsApp’s decision to deploy E2E was,” he writes. “Acton and Koum, with Zuck’s blessing, jumped off a bridge with the goal of building a monetization parachute on the way down. FB has a lot of money, so it was a very tall bridge, but it is foolish to expect that FB shareholders are going to subsidize a free text/voice/video global communications network forever. Eventually, WhatsApp is going to need to generate revenue.

“This could come from directly charging for the service, it could come from advertising, it could come from a WeChat-like services play. The first is very hard across countries, the latter two are complicated by E2E.”

“I can’t speak to the various options that have been floated around, or the arguments between WA and FB, but those of us who care about privacy shouldn’t see WhatsApp monetization as something evil,” he adds. “In fact, we should want WA to demonstrate that E2E and revenue are compatible. That’s the only way E2E will become a sustainable feature of massive, non-niche technology platforms.”

Stamos is certainly right that Apple’s iMessage cannot reach every mobile user, given the premium cost of Apple hardware.

Though he elides the important role that second hand Apple devices play in helping to reduce the barrier to entry to Apple’s pro-privacy technology — a role Apple is actively encouraging via support for older devices (and by its own services business expansion which extends its model so that support for older versions of iOS (and thus secondhand iPhones) is also commercially sustainable).

Robust encryption only being possible via multi-billion user platforms essentially boils down to a usability argument by Stamos — which is to suggest that mainstream app users will simply not seek encryption out unless it’s plated up for them in a way they don’t even notice it’s there.

The follow on conclusion is then that only a well-resourced giant like Facebook has the resources to maintain and serve this different tech up to the masses.

There’s certainly substance in that point. But the wider question is whether or not the privacy trade offs that Facebook’s monetization methods of WhatsApp entail, by linking Facebook and WhatsApp accounts and also, therefore, looping in various less than transparent data-harvest methods it uses to gather intelligence on web users generally, substantially erodes the value of the e2e encryption that is now being bundled with Facebook’s ad targeting people surveillance. And so used as a selling aid for otherwise privacy eroding practices.

Yes WhatsApp users’ messages will remain private, thanks to Facebook funding the necessary e2e encryption. But the price users are having to pay is very likely still their personal privacy.

And at that point the argument really becomes about how much profit a commercial entity should be able to extract off of a product that’s being marketed as securely encrypted and thus ‘pro-privacy’? How much revenue “scale” is reasonable or unreasonable in that scenario?

Other business models are possible, which was Acton’s point. But likely less profitable. And therein lies the rub where Facebook is concerned.

How much money should any company be required to leave on the table, as Acton did when he left Facebook without the rest of his unvested shares, in order to be able to monetize a technology that’s bound up so tightly with notions of privacy?

Acton wanted Facebook to agree to make as much money as it could without users having to pay it with their privacy. But Facebook’s management team said no. That’s why he’s calling them greedy.

Stamos doesn’t engage with that more nuanced point. He just writes: “It is foolish to expect that FB shareholders are going to subsidize a free text/voice/video global communications network forever. Eventually, WhatsApp is going to need to generate revenue” — thereby collapsing the revenue argument into an all or nothing binary without explaining why it has to be that way.

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Google gets more RCS messaging support from Samsung

Posted by | Android, Apps, Asia, Google, imessage, jibe mobile, messaging apps, Mobile, Rich Communications Services, Samsung, samsung galaxy, samsung galaxy s8, smartphones, SMS, WhatsApp | No Comments

Google has secured a bit more buy in from Samsung for a next generation text messaging standard it’s long been promoting.

The Android OS maker’s hope for Rich Communication Services (RCS), which upgrades what SMS can offer to support richer comms and content swapping, can provide its fragmented Android ecosystem with a way to offer comparably rich native messaging — a la Apple’s iMessage on iOS.

But it’s a major, major task given how many Android devices are out there. And Google needs the entire industry to step with it to support RCS (not just device makers but carriers too) if it’s going to achieve anything more than fiddling around the edges.

Zooming out for a moment, the even bigger problem is the messaging ship has sailed, with massively popular platforms like WhatsApp and Telegram having already offloaded billions of users into their respective walled gardens, pulling the center of gravity away from SMS.

Not that that has stopped Google trying, though, even as it has been muddled in its strategy too — spreading its messaging efforts around quite a bit (with false starts like Allo).

Google doubled down on RCS in April when it pulled resources from the standalone Allo messaging app to focus on trying to drum up more support for next-gen SMS instead.

It has also managed to build a modicum of momentum behind RCS. At this year’s Mobile World Congress it announced more than 40 carriers now backed RCS — up from ~27 the year before. The most recent support figure put the carrier number at 55.

But, three years on from its acquisition of RCS specialist Jibe Mobile — and ambitious talk of building ‘the future of messaging’ — there’s little sign of that.

An added wrinkle is that carriers also have to have actively rolled out RCS support, not just stated they intend to. And it’s not clear exactly how many have.

Nor is it clear how many users of RCS there are at this stage. (Back in 2016 carriers were merely talking about building “a path” to one billion users — at a time when SMS had several billions of users, suggesting they saw little chance of creating anything near next-gen messaging ubiquity via the standard.)

The latest Google-backed RCS development, announced via press release, is of an “expanded collaboration” between Mountain View and Samsung — saying their respective message clients will “work seamlessly with each company’s RCS technology, including cloud and business messaging platforms”.

The pair have previously added RCS support to “select Samsung devices” but are now saying RCS features will be brought to some existing Samsung smartphones — including (and beginning with) the Galaxy S8 and S8+, as well as the S8 Active, S9, S9+, Note8, Note9, and select A and J series running Android 9.0 or later.

Which sounds like a fair few devices. But it’s also muddier than that — because again support remains subject to carrier and market availability. So won’t be universal across even that subset of Samsung Android handsets.

They also now say that (select) new Samsung Galaxy smartphones will natively support RCS messaging. But, again, that’s only where carriers support the standard.

“This means that consumers and brands will be able to enjoy richer chats with both Android Messages and Samsung Messages users,” they add, after their string of caveats.

Despite the PR ending on an upbeat note — with the two companies talking about bringing an “enhanced messaging experience across the entire Android ecosystem” — there’s clearly zero chance of that. A clear consequence of the rich ‘biodiversity’ of the Android ecosystem is reduced ubiquity for cross-device standardization plays like this. 

Still, if Google can cherry pick enough flagship devices and markets to buy in to supporting RCS it might have figured that’s critical messaging mass enough to stack against Apple’s iMessage. So added buy in from Samsung — whose high end devices are most often contending with iPhones for consumers’ cash — is certainly helpful to its strategy.

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WhatsApp hits India’s Jio feature phones amidst fake news violence

Posted by | Apps, fake news, hardware, india, Mobile, Policy, reliance jio, Social, TC, WhatsApp | No Comments

False rumors forwarded on WhatsApp have led angry mobs to murder strangers in India, but the Facebook-owned chat app is still racing to add users in the country. Today it launched a feature phone version of WhatsApp for JioPhone 1 and 2’s KaiOS, which are designed to support 22 of India’s vast array of native languages. Users will be able to send text, photos, videos and voice messages with end-to-end encryption, though it will lack advanced features like augmented reality and Snapchat Stories-style Status updates.

WhatsApp was supposed to launch alongside the JioPhone 2 that debuted last month for roughly $41, but was delayed. Forty million JioPhone 1s had already been sold, and it’s been estimated to control 27 percent of the Indian mobile phone market and 47 percent of the country’s feature phone market. Coming to JioPhone should open up a big new growth vector for WhatsApp as it strives to grow its 1.5 billion user count toward the big 2 billion milestone.Meanwhile, it could make the Reliance-owned Jio mobile network more appealing. It also could strengthen the KaiOS operating system, developed by a San Diego startup of the same name that recently took a $22 million investment from Google. WhatsApp rolls out on the JioPhone AppStore today and should be available to everyone by September 20th. The companu wouldn’t say if the app will come to other KaiOS devices made by Nokia and Alcatel.

Facebook has started to squeeze WhatsApp, replacing its departed co-founders with Chris Daniels, who formerly ran the Internet.org and Free Basics accessibility initiative that got kicked out of India over net neutrality concerns. That doesn’t bode well for him now overseeing WhatsApp’s high-risk/high-reward scenario in India. The massive nation is core to the chat app’s growth strategy, but the attacks it’s spurred have lost it India’s hearts and minds.

WhatsApp has scrambled to safeguard its app after numerous reports of rumors circulated on its app about gangs and child abductors led angry mobs to kill people in the streets. Five nomads were recently beaten to death in the rural village of Rainpada after residents watched inaccurate videos forwarded through WhatsApp about kidnappers supposedly rolling through the area, BuzzFeed reports.

This photo illustration shows an Indian newspaper vendor reading a newspaper with a full back page advertisement from WhatsApp intended to counter fake information, in New Delhi on July 10, 2018. – Facebook owned messaging service WhatsApp on July 10 published full-page advertisements in Indian dailies in a bid to counter fake information that has sparked mob lynching attacks across the country. (Photo by Prakash SINGH / AFP) (Photo credit should read PRAKASH SINGH/AFP/Getty Images)

WhatsApp recently limited how many people you can forward a message to, labeled forwarded messages, and began a radio PSA campaign in Hindi on 46 India stations warning people to verify things they hear on WhatsApp before acting on them.

“The challenge of mob violence requires action from governments, civil society, and technology companies. That’s why WhatsApp launched a broad user education campaign over radio in India and is working with Jio to educate new users about misinformation” a WhatsApp spokesperson tells me. “WhatsApp was built as an alternative to SMS messaging and we think people should be able to text their loved ones across borders without paying exorbitant charges to do so.”

But it’s clear that parent company Facebook sees spreading WhatsApp as part of its mission to bring the world closer together, even as that comes at a cost. The government has pushed WhatsApp to build workarounds for its encryption to identify the source of rumors and misinformation videos. But a WhatsApp spokesperson told BuzzFeed News that “We believe that building ‘traceability’ into WhatsApp would undermine end-to-end encryption and the private nature of WhatsApp creating the potential for serious misuse . . . we will not weaken the privacy protections we provide.”

Jio’s “transition” phones that offer a few third-party apps but not full-fledged smartphone capabilities, alongside its affordable mobile data, have significantly reduced the cost and friction of being online in India. But with that access comes newfound dangers, especially if not combined with news literacy and digital skills education that could help users spot false information before it sparks violence. Lower income users interested in Jio’s feature phones may have even less access to the education needed to not believe everything they read on WhatsApp. What was once a smartphone problem is becoming an every phone problem.

Increasingly the tech world is learning that connecting people to the internet also means connecting them to the worst elements of humanity. That will necessitate a new wave of pessimists and cynics as product managers in order to predict and thwart ways to abuse software instead of allowing idealists to blindly build tools that can be weaponized.

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WhatsApp finally earns money by charging businesses for slow replies

Posted by | Advertising Tech, Apps, Developer, eCommerce, Enterprise, Mobile, Social, TC, WhatsApp | No Comments

Today WhatsApp launches its first revenue-generating enterprise product and the only way it currently makes money directly from its app. The WhatsApp Business API is launching to let businesses respond to messages from users for free for up to 24 hours, but will charge them a fixed rate by country per message sent after that.

Businesses will still only be able to message people who contacted them first, but the API will help them programatically send shipping confirmations, appointment reminders or event tickets. Clients also can use it to manually respond to customer service inquiries through their own tool or apps like Zendesk, MessageBird or Twilio. And small businesses that are one of the 3 million users of the WhatsApp For Business app can still use it to send late replies one-by-one for free.

After getting acquired by Facebook for $19 billion in 2014, it’s finally time for the 1.5 billion-user WhatsApp to pull its weight and contribute some revenue. If Facebook can pitch the WhatsApp Business API as a cheaper alternative to customer service call centers, the convenience of asynchronous chat could compel users to message companies instead of phoning.

Only charging for slow replies after 24 hours since a user’s last message is a genius way to create a growth feedback loop. If users get quick answers via WhatsApp, they’ll prefer it to other channels. Once businesses and their customers get addicted to it, WhatsApp could eventually charge for all replies or any that exceed a volume threshold, or cut down the free window. Meanwhile, businesses might be too optimistic about their response times and end up paying more often than they expect, especially when messages come in on weekends or holidays.

WhatsApp first announced it would eventually charge for enterprise service last September when it launched its free WhatsApp For Business app that now has 3 million users and remains free for all replies, even late ones.

Importantly, WhatsApp stresses that all messaging between users and businesses, even through the API, will be end-to-end encrypted. That contrasts with The Washington Post’s report that Facebook pushing to weaken encryption for WhatsApp For Business messages is partly what drove former CEO Jan Koum to quit WhatsApp and Facebook’s board in April. His co-founder, Brian Acton, had ditched Facebook back in September and donated $50 million to the foundation of encrypted messaging app Signal.

Today WhatsApp is also formally launching its new display ads product worldwide. But don’t worry, they won’t be crammed into your chat inbox like with Facebook Messenger. Instead, businesses will be able to buy ads on Facebook’s News Feed that launch WhatsApp conversations with them… thereby allowing them to use the new Business API to reply. TechCrunch scooped that this was coming last September, when code in Facebook’s ad manager revealed the click-to-WhatsApp ads option and the company confirmed the ads were in testing. Facebook launched similar click-to-Messenger ads back in 2015.

Finally, WhatsApp also tells TechCrunch it’s planning to run ads in its 450 million daily user Snapchat Stories clone called Status. “WhatsApp does not currently run ads in Status though this represents a future goal for us, starting in 2019. We will move slowly and carefully and provide more details before we place any Ads in Status,” a spokesperson told us. Given WhatsApp Status is more than twice the size of Snapchat, it could earn a ton on ads between Stories, especially if it’s willing to make some unskippable.

Together, the ads and API will replace the $1 per year subscription fee WhatsApp used to charge in some countries but dropped in 2016. With Facebook’s own revenue decelerating, triggering a 20 percent, $120 billion market cap drop in its share price, it needs to show it has new ways to make money — now more than ever.

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Facebook loses $120 billion in market cap after awful Q2 earnings

Posted by | Apps, Facebook, Facebook ads, Facebook Earnings, facebook privacy, Facebook Stories, Finance, instagram, Mobile, Snapchat Clone, Social, WhatsApp | No Comments

Facebook’s share price fell over 20 percent in after-hours trading today after the company announced its slowest-ever user growth rate and a scary warning that its revenue growth would rapidly decelerate. Before today’s brutal Q2 earnings, Facebook’s share price closed today at $217.50 – a record high — but fell to around $172 after the earnings call. That’s a market cap drop of roughly $123 billion. In two hours, Facebook lost more value than most startups and even public companies are ever worth.

Here’s the full story on Facebook’s disastrous Q2 2018 earnings:

So why did Facebook’s share price sink like a stone? There are five big reasons:

Slowest-Ever User Growth Rate – Facebook’s monthly user count grew just 1.54, compared to 3.14 last quarter. Daily active users grew even slower at 1.44 percent, compared to 3.42 percent last quarter. For reference, 2.18 percent was its previous slowest DAU growth rate back in Q4 2017. Suddenly hitting this wall could limit Facebook’s total user count over the long-run, and its revenue with it. Facebook tried to distract from these facts by announcing a new “family of apps audience” metric of 2.5 billion people using at least one of its apps, which will hide the shift of users from Facebook to Instagram and WhatsApp.

User Count Shrank In Europe, Flat In US & Canada – Facebook saw its first-ever decline in monthly user count in Europe, from 377 million to 376 million. It got stuck at 241 million in the US & Canada after similarly pausing at 239 million in Q4 2017. Those are Facebook’s two most lucrative markets, with it earning $25.91 per user in North America and $8.76 in Europe. If those markets stall, even swift growth in the Rest Of World region where it earns just $1.91 per user won’t save it.

Decelerating Revenue Growth – Facebook’s revenue grew a remarkable 42 percent year-over-year this quarter. But CFO David Wehner warned that metric would decelerate by high single-digit percentage per quarter over the coming quarters. Wehner said a combination of currency headwinds, new privacy controls, and new experiences like Stories will contribute to the deceleration. This news is what caused Facebook’s share price to drop from -7 percent to `-20 percent.

Privacy And Well-Being – Q2 saw the debut of Europe’s GDPR that forced Facebook to change its privacy policies and get users to agree to how it collects data about them. Wehner blamed GDPR for Facebook loss of users in Europe. That law and Facebook’s Cambridge Analytica scandal led the company to have to improve its privacy controls. These could make it tougher for Facebook to target people with ads or show their content to more people.

Meanwhile, Facebook has continued to adopt the “Time Well Spent” philosophy, removing click-bait news and crappy viral videos that lead to passive internet content consumption that studies say is unhealthy. Instead, Facebook is pushing features like Watch Party where users actively interact with each other. Those might not produce as much time on site and subsequent ad views, but CEO Mark Zuckerberg said the changes are “positive and we’re going to continue in this direction.”

The Shift To Stories – Facebook estimates that by in 2019, sharing via ephemeral vertical Stories slideshows will surpass sharing via feeds. The problem is that advertisers may be slower than users to make that shift. “Will this monetize at the same rate as News Feed? We honestly don’t know” COO Sheryl Sandberg said. Stories ads might be full-screen and more immersive, but they don’t show off links to online stores as well, nor are they as well optimized from decades of banner ad experience by the industry.

Luckily, even though Snapchat invented the Stories format, Facebook has far more people using it each day, with 150 million Stories users on Facebook, 70 million on Messenger, 400 million on Instagram, and 450 million on WhatsApp . If Facebook does manage to figure out Stories ads, it could dominate, but it could take years for its advertiser count and ad prices to rise to offset the shift away from feeds.

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2.5 billion people use at least one of Facebook’s apps

Posted by | Apps, Facebook, facebook messenger, instagram, Mobile, Social, TC, WhatsApp | No Comments

Facebook is hiding that users are leaving its main app but sticking with Instagram and WhatsApp by publicizing a new metric. Facebook today for the first time announced that in June, 2.5 billion people used at least one of its apps: Facebook, Instagram, WhatsApp, or Messenger. That’s a helpful number because it counts real people, rather than accounts, since people can have multiple accounts on a single app. 2.5 billion people compares to 2.23 billion monthly users on Facebook, 1 billion users on Instagram, 1.5 billion users on WhatsApp, and 1.3 billion users on Messenger.

Mark Zuckerberg announced the new stat on Facebook’s Q2 2018 earnings call following a tough report that saw its user growth slow to its lowest rate ever. Zuckerberg said the 2.5 billion count “Individual people rather than active accounts” which he says “excludes when people have multiple accounts on a single app. And it reflects that many people use more than one of our services.”

It seems as if Facebook announced the stat in hopes of deflecting attention from the fact that its user count shrank in Europe and was flat in the US & Canada, contributing to extraordinarily low monthly and daily user growth. That growth trouble in turn sent Facebook’s share price down over 20 percent in after-hours trading.

On the 2.5 billion stat, Facebook CFO David Wehner explained that “We believe this number better reflects the size of our community.” He also clarified that Facebook’s monthly active user count of 2.23 billion “does count multiple accounts for a single user, and that accounts for 10 percent of Facebook’s MAU” or 223 million.

By bundling the user counts into a “family of apps audience metric”, Facebook can obscure the fact that its core app is hitting a wall. Instead, it can rely on WhatsApp and Instagram to shore up the number. For example, if teens slip from Facebook to Instagram, they’ll still be counted in the new metric. But that doesn’t change the fact that the company’s main money-maker is losing its edge.

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Chat app Line gets serious about gaming with its latest acquisition

Posted by | Apps, Asia, computing, Facebook, facebook messenger, Fundings & Exits, Gaming, Indonesia, iPhone, iTunes, Japan, line, messaging apps, Messenger, Nintendo, payments, ride hailing, social media, Software, taiwan, Thailand, WhatsApp, world wide web | No Comments

Line, the company best-known for its popular Asian messaging app, is doubling down on games after it acquired a controlling stake in Korean studio NextFloor for an undisclosed amount.

NextFloor, which has produced titles like Dragon Flight and Destiny Child, will be merged with Line’s games division to form the Line Games subsidiary. Dragon Flight has racked up 14 million users since its 2012 launch — it clocked $1 million in daily revenue at peak. Destiny Child, a newer release in 2016, topped the charts in Korea and has been popular in Japan, North America and beyond.

Line’s own games are focused on its messaging app, which gives them access to social features such as friend graphs, and they have helped the company become a revenue generation machine. Alongside income from its booming sticker business, in-app purchases within games made Line Japan’s highest-earning non-game app publisher last year, according to App Annie, and the fourth highest worldwide. For some insight into how prolific it has been over the years, Line is ranked as the sixth highest earning iPhone app of all time.

But, despite revenue success, Line has struggled to become a global messaging giant. The big guns WhatsApp and Facebook Messenger have in excess of one billion monthly users each, while Line has been stuck around the 200 million mark for some time. Most of its numbers are from just four countries: Japan, Taiwan, Thailand and Indonesia. While it has been able to tap those markets with additional services like ride-hailing and payments, it is certainly under pressure from those more internationally successful competitors.

With that in mind, doubling down on games makes sense and Line said it plans to focus on non-mobile platforms, which will include the Nintendo Switch among others consoles, from the second half of this year.

Line went public in 2016 via a dual U.S.-Japan IPO that raised over $1 billion.

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