WhatsApp: Why Facebook Paid $19 Billion For Your Digits

photo credit Sam Azgor

This Monday, Mark Zuckerberg spoke at the Mobile World Congress in Barcelona, commenting publicly for the first time on Facebooks acquisition of WhatsApp. A mere $19 billion dollars of cash and stock, this is the biggest technology acquisition of the past decade and gives WhatsApp a valuation similar to that of the Gap, Inc.. Zuckerberg says Facebook and WhatsApp’s “shared goal (is to) connect everyone in the world.” Whether they like it or not, apparently. As per always, the strategy behind this buy is raising some pretty serious privacy concerns.

Even though half of Facebook’s daily users are accessing the site via mobile, users have (for the most part) been cautious enough to restrict the access Facebook has to the contacts on their phones. Most users, mobile or web, do not share their phone number – let alone those of their friends, family, and colleagues. By acquiring WhatsApp, Facebook is able to obtain phone numbers users themselves may have opted to not share, and then match them to their Facebook profiles – and those of their friends. So even if you never gave Facebook your number, if your friend has it – Facebook may very well have it.

Yesterday, Bloomberg reported that the European Union and 28 other data protection regulators intend to investigate the WhatsApp/Facebook relationship. Jacob Kohnstamm, leader of a team of the European Union called the “Article 29 Data Protection Working Party”, states, “The company’s collection of data of people that aren’t using WhatsApp is extreme and is not compliant with Dutch and European law.”

We can’t possibly know how Facebook intends to use this treasure trove of information, but you can bet your bottom dollar that there’s a plan in place, with this level of investment. For now, we’ll just have to wait and see how this unfolds, and pay close attention to what steps government departments choose to take next.

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