I guess I would point to the Yahoo security breach as an example of how poor security can have an adverse financial effect on a company valuation and its CEO's remuneration. The Sony hack also comes to mind as something which damaged it's reputation and had an indirect affect on their financial position.

If hackers could get access to WhatsApp and dump all messages to Wikileaks it would make the company look very bad and a significant number of users would switch to something else. If security is not that important to users, why pretend to add end-to-end encryption at all?

And even if Facebook / WhatApp's customers don't care about security, their hired geeks do; and being seen as caring about having topnotch security might help with attracting and retaining talent.

> Most of their userbase likely still doesn't care about security

Teen Vogue just suggested people should use WhatsApp instead of Snapchat because it does end-to-end crypto. I don't think it's true any more that the general public doesn't care about security, if it was ever true.

http://www.teenvogue.com/story/how-to-keep-messages-secure

Based on the behavior after these leaks, there's moderate evidence to suggest that users care somewhat about privacy if it can be accomplished without any sacrifices in existing ease-of-use.

Facebook cares mostly about penetration for Whatsapp, to ensure that no other messaging app takes over.

HN, CNET, Motherboard, Slashdot, Ars, TC, NYT tech etc.

Free product advertising worth $N targeted to the more influential product adopters, who will then amplify said advertisements.

That's my guess, anyway.