Exclusive: WhatsApp Cofounder Brian Acton Gives The Inside Story On #DeleteFacebook And Why He Left $850 Million Behind

Now he’s talking publicly for the first time. Under pressure from Mark Zuckerberg and Sheryl Sandberg to monetize WhatsApp, he pushed back as Facebook questioned the encryption he’d helped build and laid the groundwork to show targeted ads and facilitate commercial messaging.

Acton also walked away from Facebook a year before his final tranche of stock grants vested. “It was like, okay, well, you want to do these things I don’t want to do,” Acton says. “It’s better if I get out of your way. And I did.” It was perhaps the most expensive moral stand in history. Acton took a screenshot of the stock price on his way out the door—the decision cost him $850 million.

.. “As part of a proposed settlement at the end, [Facebook management] tried to put a nondisclosure agreement in place,” Acton says. “That was part of the reason that I got sort of cold feet in terms of trying to settle with these guys.”

.. That kind of answer masks the kind of issues that just prompted Instagram’s founders to abruptly quit. Kevin Systrom and Mike Krieger reportedly chafed at Facebook and Zuckerberg’s heavy hand. Acton’s account of what happened at WhatsApp—and Facebook’s plans for it—provides a rare founder’s-level window into a company that’s at once the global arbiter of privacy standards and the gatekeeper of facts, while also increasingly straying from its entrepreneurial roots.

.. Despite a transfer of several billion dollars, Acton says he never developed a rapport with Zuckerberg. “I couldn’t tell you much about the guy,” he says. In one of their dozen or so meetings, Zuck told Acton unromantically that WhatsApp, which had a stipulated degree of autonomy within the Facebook universe and continued to operate for a while out of its original offices, was “a product group to him, like Instagram.”

.. So Acton didn’t know what to expect when Zuck beckoned him to his office last September, around the time Acton told Facebook brass that he planned to leave. Acton and Koum had a clause in their contract that allowed them to get all their stock, which was being doled out over four years, if Facebook began “implementing monetization initiatives” without their consent.

.. The Facebook-WhatsApp pairing had been a head-scratcher from the start. Facebook has one of the world’s biggest advertising networks; Koum and Acton hated ads. Facebook’s added value for advertisers is how much it knows about its users; WhatsApp’s founders were pro-privacy zealots who felt their vaunted encryption had been integral to their nearly unprecedented global growth.

.. This dissonance frustrated Zuckerberg. Facebook, Acton says, had decided to pursue two ways of making money from WhatsApp. First, by showing targeted ads in WhatsApp’s new Status feature, which Acton felt broke a social compact with its users. “Targeted advertising is what makes me unhappy,” he says. His motto at WhatsApp had been “No ads, no games, no gimmicks”—a direct contrast with a parent company that derived 98% of its revenue from advertising. Another motto had been “Take the time to get it right,” a stark contrast to “Move fast and break things.”

.. Facebook also wanted to sell businesses tools to chat with WhatsApp users. Once businesses were on board, Facebook hoped to sell them analytics tools, too. The challenge was WhatsApp’s watertight end-to-end encryption, which stopped both WhatsApp and Facebook from reading messages.

.. For his part, Acton had proposed monetizing WhatsApp through a metered-user model, charging, say, a tenth of a penny after a certain large number of free messages were used up. “You build it once, it runs everywhere in every country,” Acton says. “You don’t need a sophisticated sales force. It’s a very simple business.”

.. Acton’s plan was shot down by Sandberg. “Her words were ‘It won’t scale.’ ”

.. “I called her out one time,” says Acton, who sensed there might be greed at play. “I was like, ‘No, you don’t mean that it won’t scale. You mean it won’t make as much money as . . . ,’ and she kind of hemmed and hawed a little. And we moved on. I think I made my point. . . . They are businesspeople, they are good businesspeople. They just represent a set of business practices, principles and ethics, and policies that I don’t necessarily agree with.”

.. When Acton reached Zuckerberg’s office, a Facebook lawyer was present. Acton made clear that the disagreement—Facebook wanted to make money through ads, and he wanted to make it from high-volume users—meant he could get his full allocation of stock. Facebook’s legal team disagreed, saying that WhatsApp had only been exploring monetization initiatives, not “implementing” them.

.. Zuckerberg, for his part, had a simple message: “He was like, This is probably the last time you’ll ever talk to me.”

.. Acton graduated from Stanford with a bachelor’s in computer science and eventually became one of the first employees at Yahoo in 1996, making millions in the process. His biggest asset from that time at Yahoo: befriending Koum, a Ukrainian immigrant he clicked with over their similar no-nonsense style.

.. WhatsApp, persuading a handful of former Yahoo colleagues to fund a seed round while he took on cofounder status and wound up with a roughly 20% stake.

.. two things sparked Zuckerberg’s mega-offer in early 2014. One was hearing that WhatsApp’s founders had been invited to Google’s Mountain View headquarters for talks, and he did not want to lose them to a competitor.

.. He recalls Zuckerberg being “supportive” of WhatsApp’s plans to roll out end-to-end encryption, even though it would block attempts to harvest user data. If anything, he was “quick to respond” during the discussions. Zuckerberg “was not immediately evaluating ramifications in the long term.”

.. told them that they would have “zero pressure” on monetization for the next five years.

.. Facebook prepared Acton to meet with around a dozen representatives of the European Competition Commission in a teleconference. “I was coached to explain that it would be really difficult to merge or blend data between the two systems,”

.. Later he learned that elsewhere in Facebook, there were “plans and technologies to blend data.” Specifically, Facebook could use the 128-bit string of numbers assigned to each phone as a kind of bridge between accounts. The other method was phone-number matching, or pinpointing Facebook accounts with phone numbers and matching them to WhatsApp accounts with the same phone number.

.. Within 18 months, a new WhatsApp terms of service linked the accounts and made Acton look like a liar. “I think everyone was gambling because they thought that the EU might have forgotten because enough time had passed.” No such luck: Facebook wound up paying a $122 million fine for giving “incorrect or misleading information” to the EU—a cost of doing business

.. Linking these overlapping accounts was a crucial first step toward monetizing WhatsApp. The terms-of-service update would lay the groundwork for how WhatsApp could make money. During the discussions over these changes, Facebook sought “broader rights” to WhatsApp user data, Acton says, but WhatsApp’s founders pushed back, reaching a compromise with Facebook management. A clause about no ads would remain, but Facebook would still link the accounts to present friend suggestions on Facebook and offer its advertising partners better targets for ads on Facebook.

.. By then, three years since the deal, Zuckerberg was growing impatient, Acton says, and he expressed his frustrations at an all-hands meeting for WhatsApp staffers. “The CFO projections, the ten-year outlook—they wanted and needed the WhatsApp revenues to continue to show the growth to Wall Street,”

.. Internally, Facebook had targeted a $10 billion revenue run rate within five years of monetization, but such numbers sounded too high to Acton—and reliant on advertising.

.. Acton had left a management position on Yahoo’s ad division over a decade earlier with frustrations at the Web portal’s so-called “Nascar approach” of putting ad banners all over a Web page. The drive for revenue at the expense of a good product experience “gave me a bad taste in my mouth,” Acton remembers. He was now seeing history repeat.

.. He has supercharged a small messaging app, Signal, run by a security researcher named Moxie Marlinspike with a mission to put users before profit, giving it $50 million and turning it into a foundation. Now he’s working with the same people who built the opensource encryption protocol that is part of Signal and protects WhatsApp’s 1.5 billion users and that also sits as an option on Facebook Messenger, Microsoft’s Skype and Google’s Allo messenger. Essentially, he’s re-creating WhatsApp in the pure, idealized form it started: free messages and calls, with end-to-end encryption and no obligations to ad platforms.

Of course Omarosa has tapes

It’s hard to take Omarosa Manigault Newman’s word for anything. But Lordy, she has tapes, and they offer vivid proof that Donald Trump’s White House is part clown show, part nest of vipers.

.. she performed with Shakespearean villainy —

  • lying,
  • cheating,
  • backstabbing,
  • viciously advancing her own interests and
  • sabotaging her rivals.

Trump evidently found all of this admirable, because he insisted on bringing her into his administration as a top-level adviser despite her utter lack of experience and qualifications. They deserve each other.

.. Omarosa’s recording of part of that meeting was aired Sunday on NBC’s “Meet the Press.” In it, Kelly is heard making what sounds very much like a threat:

“I think it’s important to understand that if we make this a friendly departure, we can all be, you know, we can look at your time here in the White House as a year of service to the nation. And then you can go on without any type of difficulty in the future relative to your reputation.”

If that wasn’t clear enough, Omarosa subsequently received a generous offer. She could receive $15,000 a month to perform vaguely defined duties for Trump’s reelection campaign. But she would have to sign a nondisclosure and nondisparagement agreement pledging not to say detrimental things about President Trump, Vice President Pence or their family members.

.. She declined the offer but kept the documents she was asked to sign — and showed them to The Post last week.

..  She never made it, never will. She begged me for a job, tears in her eyes, I said Ok. People in the White House hated her. She was vicious, but not smart. I would rarely see her but heard really bad things. Nasty to people & would constantly miss meetings & work. When Gen. Kelly came on board he told me she was a loser & nothing but problems. I told him to try working it out, if possible, because she only said GREAT things about me — until she got fired!”

.. Trump went on to complain that “the Fake News Media will be working overtime” to make Omarosa seem credible now that she is one of his critics. But that’s certainly not my intent. She strikes me as a rank opportunist whose only allegiance is to herself.

She claims to have realized only recently that Trump is a “racist, misogynist and bigot.” Yet she heard his bigoted attacks on Latino immigrants and still went to work for his campaign. She heard his misogynistic rant about how he sexually assaulted women and still took a job in his administration. She heard his many appeals to white racial grievance and still vigorously defended him, even after Charlottesville.

.. So no, I’m not inclined to believe anything she claims without documentary evidence to back it up. But the tapes and the documents have not been disputed. Omarosa may not have obtained them honorably, but the old saying is true: There is no honor among thieves.

.. We don’t know what else might be in the conversations with Trump that lawyer Michael Cohen taped. We don’t know how many other recordings Omarosa might have made. We don’t know who else in the White House might have been keeping their own unauthorized records of conversations and events.

What we do know is why people in Trump’s orbit feel they need such insurance: Dishonor and disloyalty start at the top.

 

Bad Boies

The renowned liberal attorney threw ethics out the window to help Harvey Weinstein.

Boies told Farrow that he didn’t think this was a conflict, explaining that he was doing the Times a favor by pushing the newspaper to vet its Weinstein coverage carefully. “If evidence could be uncovered to convince the Times the charges should not be published, I did not believe, and do not believe, that that would be averse to the Times’ interest,” he told the New Yorker.

 .. In the Trump era, we often measure justice along one simple axis, one that pits the president and his bullying New York attack dogs against legal rules and norms. But there is and has always been a second axis, one populated by respectable, principled attorneys who will work against the rule of law when they are working for the extremely wealthy. Consider Jamie Gorelick, the longtime Democratic activist and deputy attorney general under Bill Clinton, who represented Jared Kushner and Ivanka Trump in their business affairs. While Gorelick stepped back in July from handling anything related to Kushner and the Russia probe, her view has always been that everyone deserves quality representation.
It is a long-standing American legal tradition dating back to John Adams that even contemptible people deserve good representation. The problem comes when counsel for the 1 percent finds themselves helping their clients contract out of, or bully their way around, the legal rules imposed upon the rest of us.
wealthy to fail.

What Boies seems to have done here is the very opposite of fighting for the rule of law. Rather, it looks an awful lot like aiding and abetting a man determined to bypass legal sanctions with money, privilege, and terror. At the very least, he created an attorney-client bubble around grotesque abuse. But Boies also should have known what lawyers and investigators were doing to vulnerable women in the interest of protecting Weinstein. In conceding that he failed to supervise or manage a raft of outside investigators, Boies was also admitting that Weinstein essentially bought his way around his legal relationship with his lawyer, then deployed that same legal relationship for cover.

There are many, many legal stratagems that allow society’s wealthiest to buy their way out of criminal and civil sanctions. In Weinstein’s case, those stratagems have included oppressive nondisclosure agreements and legal threats and attempts to confuse and harass witnesses. Anyone who has watched Donald Trump ooze his way out from under oodles of lawsuits knows that there have always been Platinum Elite workarounds for the rule of law—and lawyers willing to fly you there. This week we learned that Boies may very well be one of them.

Bill O’Reilly’s Fox News career comes to a swift end amid growing sexual harassment claims

“Over the past 20 years at Fox News, I have been extremely proud to launch and lead one of the most successful news programs in history, which has consistently informed and entertained millions of Americans and significantly contributed to building Fox into the dominant news network in television,” he said. “It is tremendously disheartening that we part ways due to completely unfounded claims.

.. The company and O’Reilly paid out $15 million in exchange for his accusers’ silence.

.. But the prospect that his accusers — bound by non-disclosure agreements as a result of their settlements — wouldn’t speak in anything but general terms led the company to believe it could weather the Times story.

.. In fact, it was a sixth accuser — a former guest on O’Reilly’s program named Wendy Walsh — who may have been the key to his unraveling. Unlike the women who received settlements for their complaints, Walsh never sued or settled with O’Reilly, leaving her free to speak in public about her allegations. She did so repeatedly, putting a name, face and voice to the allegations in media accounts.

.. On Tuesday, another woman came forward, anonymously, to complain that she had been harrassed with racial and sexual comment by O’Reilly in 2008.

.. The network, however, continued to roll in record ratings, driven in part by viewer interest in Donald Trump, a longtime friend of Ailes, Murdoch and O’Reilly and a frequent interview guest on Fox programs ..

.. “The O’Reilly Factor” has been the network’s flagship show for nearly 20 years, and in many ways has embodied its conservative-oriented spirit.

.. drew an average of 4 million viewers each night during the first three months of the year, the most ever for a cable-news program.

.. intense media coverage surrounding O’Reilly led to a stampede of advertisers away from O’Reilly’s program, leaving it almost without sponsorship over the past two weeks.

.. The O’Reilly controversy has been casting a shadow over 21st Century’s $14 billion bid to win the British government’s approval to buy Sky TV, the British satellite service. Leaving O’Reilly in place would likely have been a public-relations nightmare

.. The Murdoch family abandoned a 2011 offer for Sky amid another scandal, the phone-hacking conspiracy perpetrated by employees of the Murdoch-owned News of the World tabloid in London.

.. Since the Ailes scandal erupted, the company has continued to employ almost all of the senior managers who were in charge when Ailes was allegedly harassing employees, including Bill Shine, currently Fox’s co-president. Shine was accused of enabling Ailes’s retaliatory efforts against an accuser, Fox contributor Julie Roginsky

The real impact of Corey Lewandowski’s nondisclosure agreement with Donald Trump

So the question remains: Can Lewandowski really criticize Trump if the nondisclosure agreement he signed — and he did acknowledge signing one — includes the same language reportedly contained in another ex-employee’s contract?

.. According to experts in employment law, the answer to whether Lewandowski can freely bash his former boss — not that he has shown any inclination to do so — is yes … ish.

“It’s very hard to think of a scenario under which [a non-disparagement clause] is enforceable,” said Alan Hyde, an attorney who has represented the National Labor Relations Board and now teaches contracts and employment law at the Rutgers University School of Law. “It’s mostly there to be cautionary.”