Why does Meta want to push ads in WhatsApp now? Trump might be at the heart of it

Gus Carlson is a U.S.-based columnist for The Globe and Mail.

Meta’s announcement last week that it will introduce advertising to its popular WhatsApp messaging platform surprised many, not because of its industrial logic, but because of its curious timing.

After all, Meta META-Q has owned the popular chat app since 2014 and has managed to keep its fingers out of the ad-free business model despite the obvious itch to get returns on its US$19-billion investment. Why fiddle with it now?

More to the point, the company is embroiled in a nasty antitrust case with the U.S. Federal Trade Commission centered on its high-profile acquisitions of WhatsApp and Instagram. Keeping a low profile on Exhibit A in the case would seem prudent until it is settled.

So why does Meta CEO Mark Zuckerberg feel emboldened to poke federal regulators with such a blockbuster move?

Certainly, the financial argument to inject advertising into WhatsApp is compelling. The app has grown to more than three billion monthly users, more than 100 million in North America. The initial revenue stream from ads is expected to generate US$1-billion.

And while Mr. Zuckerberg has never been shy about voicing his contempt for regulators, there may be another factor behind the timing of his bold step to monetize WhatsApp: His increasingly strong alignment with U.S. President Donald Trump.

For years, Mr. Zuckerberg and Mr. Trump have had a challenging relationship. But in the last several months, the Meta CEO has become much more of an ally than a foe to the administration.

Meta to end fact-checking on Instagram, Facebook in bid to align with Trump’s policies

Mr. Zuckerberg has made several moves to get into the President’s good graces. He has had multiple meetings with Mr. Trump at Mar-a-Lago to discuss a wide range of issues, including the future of artificial intelligence.

Through Meta, he donated $1-million to the President’s inaugural fund – and he and his wife, Priscilla Chan, were seated on the VIP stage with other tech leaders, including Amazon’s Jeff Bezos, Tesla’s Elon Musk and Apple’s Tim Cook, on inauguration day.

In a not-so-subtle favour, Dana White, the CEO of Ultimate Fighting Championship and fierce Trump ally was appointed to Meta’s board. It was a head-scratcher, except perhaps for those who believe mixed martial arts prowess drives tech success.

Even before Mr. Trump was elected, Mr. Zuckerberg was sowing the seeds of a new relationship. He was increasingly critical of former U.S. President Joe Biden for what Mr. Zuckerberg described as the president’s reluctance to engage with tech leaders on issues such as AI.

Considering Mr. Zuckerberg’s latest overtures to President Trump, it seems he feels somewhat favoured – even protected – in his fight with regulators. If he doesn’t get the outcome he wants, a quick call to the White House or Mar-a-Lago may change the tide. Which sheds some light on the WhatsApp timing.

Still, there are real business risks in his move, which marks a significant shift away from what made WhatsApp popular in the first place: end-to-end encryption technology that allows friends and family to communicate without third-party interference in an ad-free environment.

Some loyal users will be angered, annoyed or spooked by the abandonment of WhatsApp’s unique ad-free environment that differentiates it from platforms such as Facebook and Instagram.

Remember, WhatsApp was created expressly as a counter to ad-heavy social media platforms. Its co-founders, Jan Koum and Brian Acton, made no secret about their dislike of the advertising industry and the incursion of advertising into various platforms.

That posture put them at odds with Facebook leadership, who wanted to populate the app with advertising and other features, and the pair eventually left the company.

The wild card in Mr. Zuckerberg’s decision is how vigorous the pushback will be and how many users will flee.

To dampen concerns, Meta said ads will appear only in the platform’s Updates section. But the company will collect data on users – such as location, language preferences and how users interact with ads – to be used to target advertising. Meta will also add search ads and subscriptions through WhatsApp’s Channels feature.

In acknowledging the risks, the company vowed not to touch the contents of personal messages or insert ads into chats.

If you believe that, well, you probably also believed that once – just once – Lucy van Pelt wouldn’t pull the football away when Charlie Brown went to kick it.

The hard truth is Meta spent a lot of money to buy WhatsApp back in 2014 and it needs to get some return.

With WhatsApp’s huge user base and the revenue potential it represents, the temptation for Meta to fiddle with the bread-and-butter of its business model is overwhelming.

And the timing, with some implied air cover from the White House, makes some sense.

For Mr. Zuckerberg, it’s a potential win-win. By monetizing WhatsApp, he’s not only unlocking a huge revenue steam – he’s also giving the feds the finger.