WhatsApp focuses on costs as it prepares to join Facebook

As the acquisition draws to a close, co-founder says company is most concerned with growing its user base and engagement and would be happy to just break even.

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Brian Acton, WhatsApp co-founder, at an event sponsored by StartX, a Stanford-affiliated nonprofit startup accelerator, on Wednesday. StartX

Facebook better not expect to make back its $19 billion from WhatsApp anytime soon.

WhatsApp's co-founder Brian Acton said Wednesday during a Stanford University-affiliated event that his company isn't particularly concerned with pulling in profits, and in fact is just happy enough to break even, despite being the largest acquisition in Facebook's history.

The five-year-old messaging app, which connects customers to send missives to one another over the Internet rather than using traditional SMS messages through a phone carrier, has reached half a billion customers each month. It's growing particularly fast in Brazil, Mexico, Russia, and India. Facebook said in February it planned to purchase WhatsApp for $19 billion in cash and stock, a plan that's so far been approved by the FTC but still requires other regulatory approvals.

Acton, a graduate of Stanford University and former employee of Apple and Yahoo, said his company has been tasked by Facebook CEO Mark Zuckerberg and COO Sheryl Sandberg with building its user base and increasing engagement, rather than pulling in profits.

"Mark and Sheryl have said focus on growth and engagement and leave the rest to us," he said. "That's music to our ears."

The company has instead focused on cost controls with a goal of at least breaking even, Acton said.

The WhatsApp deal was largely a surprise when it was announced and has since been criticized by some who are concerned over potential implications over customer's privacy.

This is not uncommon, either. Similar criticisms followed Facebook's announcement in March that it planned to purchase virtual-reality headset startup Oculus VR. Some employees even received death threats from angry supporters who were concerned with how the company would change.

Acton dismissed the criticisms leveled at his company, reiterating WhatsApp plans to remain independent after the deal closes and that it won't be sharing user data with Facebook. In addition, he said, WhatsApp has no interest in trawling through customers' messages or other data on its own.

During the panel discussion, the WhatsApp co-founder described Facebook's acquisition process as being filled with lawyers and auditors. For example, he said, it took 20 auditors to convert WhatsApp's accounting practices. He said he will be relieved when the deal closes.

For now, WhatsApp is focused on building out its messaging service with new features, such as long-anticipated voice messages, which he said will arrive this year. The company has also chosen not to focus on building tools that allow other companies to interact with its service, Acton said.

About the author

Ian Sherr is an executive editor for the west coast at CNET News. He writes about social networking and manages coverage of video games, Internet giants, cybersecurity, the sharing economy, e-commerce and wearable tech. Previously, he wrote about Apple, the PC industry and video games at The Wall Street Journal. He's also written for Reuters and the Agence France-Presse, among others. He's a native of the San Francisco Bay Area, though he knows what real weather feels like too.

 

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