May22 , 2022

Explained: Why Neeraj Arora said he regrets brokering deal between WhatsApp and Facebook

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Former WhatsApp Chief Business Officer Neeraj Arora posted on Twitter that he “regrets” having helped negotiate the messaging app’s $22 billion sale to Facebook in 2014, suggesting how the platform has changed direction after being acquired by Mark Zuckerberg’s tech giant. Arora, along with Michael Donahue (one of the earliest WhatsApp employees), have subsequently founded subscription fee-based messaging platform HalloApp.

What are Arora’s claims on WhatsApp and Facebook?

In a series of tweets Thursday, Arora detailed the discussion with Facebook around acquisition of WhatsApp, which was founded by Brian Acton and Jan Koum. He wrote that the founding team of WhatsApp had made three demands about the future of the messaging service at the time of the acquisition — no mining of user data, no ads and no cross-platform tracking. Arora also noted how the business model of WhatsApp was supposed to be a $1 annual fee for unlimited usage of the service. He claims that these demands were accepted at the time.

What has changed since then?

According to Arora’s comments to Wall Street Journal, he soured on Facebook’s reliance on online advertising and “saw its leadership as overly fixated on competition and rapid growth rather than improving core products”.

“They didn’t build with the user in mind,” Arora is quoted as saying. Shortly after the Cambridge Analytics scandal broke out in 2018, Acton, who had left WhatsApp a year before, tweeted #deletefacebook, bringing out the strained relationship between WhatsApp founders and Facebook. Arora and Koum left the company in 2018. “Tech companies need to admit when they have done wrong. Nobody knew in the beginning that Facebook would become a Frankenstein monster that devoured user data and spat out dirty money. We didn’t either,” Arora wrote on Twitter.

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Why has Arora come out with this now?

In 2019, Arora and Donahue launched HalloApp, which he claims will be ad-free with groups in the messaging apps capped at 50 users to help “minimise the potential for abuse”.

“In order for the Tech ecosystem to evolve, we need to talk about how perverse business models cause well-intentioned products, services, and ideas to go wrong. And where we go from here,” he tweeted. His comments on social media business models come at a time when Tesla and SpaceX chief Elon Musk has placed a bid to acquire microblogging site Twitter for $44 billion and has claimed that he wants to ease the content rules and promote free speech on the platform.

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