Arora says that WhatsApp’s founders were “very clear. They were not going to do it.” Meta’s attorney is getting him to pour cold water on the FTC expert’s testimony that WhatsApp would have likely ended up selling ads despite the founders’ wishes. “I would have said it’s not likely,” Arora testifies.
Arora says it was pretty customary to get such paperwork for an acquisition to ensure exclusive talks for a set period of time. After reviewing emails from the time, he testifies that Meta requested the agreement after they agreed to a deal price, but that WhatsApp did not sign it.
Neeraj Arora, who worked on an acquisition offer for WhatsApp at Google in the early 2010s before later joining the startup, is now testifying for the FTC. He’s discussing a 2010 Google presentation outlining the company’s strategic rationale for attempting to acquire the app. One of the goals listed was to “supercharge our mobile social initiatives.”
Meta’s attorney presents Rim with translated posts from his personal blog, originally written in Korean. In a November 2024 post about the Justice Department’s remedies proposals for Google’s search business, Rim wrote (according to a certified FTC translation), “admittedly, it can be difficult to imagine we are victims of Big Tech, who have made our lives so much easier.” Rim disagrees with the translation of “admittedly,” while Meta’s attorney assures him he has other certified translations.
A chart in Rim’s report comparing Instagram and WhatsApp’s engagement before and after their acquisitions is misleading, an attorney for Meta suggests in his cross-examination. The chart includes figures based on US user numbers in one color and global numbers in another. It appears that the apps had higher engagement prior to being acquired. The Meta attorney points out that the chart doesn’t distinguish between domestic usage and global usage, where engagement was lower.
That’s how Morgan Stanley proposed pitching the app to Facebook in a deck when the bank was seeking to be WhatsApp’s advisor for a sale, according to Rim. “WhatsApp could determine the social network winner on mobile,” the bank wrote. “Google’s resources combined with WhatsApp’s user base and traction could create the predominant social network on Mobile (surpassing Facebook).”
Boasberg asks Rim why he thinks WhatsApp would have eventually generated revenue despite the founders’ initial resistance to an ad model. One of the app’s investors, Jim Goetz, had earlier testified that it was “laughable” to suggest he could convince the founders to adopt ads.
While Rim agrees that WhatsApp’s investors couldn’t force the founders to do it, he says it was clear that a subscription model wouldn’t be sustainable. The fact that Goetz discussed an ad model or social network in investor memos suggests he thought it was a possible monetization path.
Rim says that, eventually, all startups need to monetize their product. “You cannot lose money forever,” he says, even as Meta CEO Mark Zuckerberg testified, WhatsApp’s founders resisted advertising and had limited ambitions. Rim says, “It’s common that founders change minds over time, especially if you are losing a lot of money, then you have to face reality.”
The FTC’s expert witness Jihoon Rim, who previously ran WhatsApp competitor Kakao, says both apps’ growth pre-acquisition were “exceptional.” On any given day, more than 60 percent of monthly users would be active, and both apps’ userbases grew very quickly. Rim says that WhatsApp’s lead investor had called it one of the highest-engagement apps they’d seen — higher, even, than Facebook.
It’s the fifth trial day in the antitrust case over its alleged social media monopoly. The big witness this week is Instagram co-founder Kevin Systrom, who’s set to testify tomorrow. The Federal Trade Commission just called its first expert witness, Jihoon Rim, an New York University professor who’s taught a course about founding a startup and worked as CEO of messaging app company Kakao.