The value of privacy

A lot of conventional wisdom holds that consumers don’t really value privacy online or they wouldn’t be online, but the market seems to be putting a pretty high valuation on it these days. Two of the hottest companies in consumer tech right now, WhatsApp and Snapchat, have each made privacy central to their pitch to users. And the former just got bought by Facebook for $16 billion (reportedly after turning down $10 billion from Google) while the later turned down a $3 billion offer from Facebook just a few months ago.

WhatsApp, which has piled up an astonishing 450 million users worldwide in just four years, pointedly does not collect any information on them beyond their mobile phone numbers, which it uses to route messages, and does not make any information about them available to advertisers or anyone else — a point it makes prominently on its home page with a blog post titled, “Why we don’t sell ads.” Nor does WhatsApp store users’ messages on its own servers. If users what to keep their chat histories, they need to create their own backups.

Snapchat won’t even reveal how many users it has (a Pew Research Center study estimated it recently at 26 million) and is built on self-erasing messages.

To be sure, the privacy angle is probably not the reason Facebook valued WhatsApp and Snapchat so highly — this is Facebook we’re talking about after all — but it’s at least part of the reason the services have attracted so many users so quickly, which is certainly one of the reasons they’re viewed as so valuable.

I’m not sure it amounts to a trend yet, but it’s interesting nonetheless.

 

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Paul Sweeting

Principal Concurrent Media Strategies

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