How does whatsapp make money 2017
How Does WhatsApp Make Money? Dissecting Its Business Model
WhatsApp is a communication platform that allows users to message each other – either via text, audio, or video.
WhatsApp makes money via fees from its Business API product as well as by imposing a transaction fee on WhatsApp Pay.
Founded in 2009, WhatsApp has grown to become the world’s largest communication platform. It is used by over 2 billion people in over 180 countries across the globe. Additionally, more than 100 billion messages are exchanged on its platform every day.
What Is WhatsApp?
WhatsApp is a messaging application that allows users to communicate with each other via text, audio, and video.
WhatsApp can be accessed via its tablet and smartphone apps (available on Android and iOS devices) as well as its web application (called WhatsApp Web).
Users can communicate with each other individually (in private chats) or via groups of up to 512 members.
WhatsApp’s platform is end-to-end encrypted, meaning that only the users in the chat can read the messages.
Apart from text messages, users can also exchange emojis, GIFs, audio messages, pictures, videos, and even share documents. They can, furthermore, react to text messages.
If users feel like sharing their special moments, they can do so via WhatsApp’s Stories feature. These moments are then displayed for 24 hours to anyone who saved the contact.
Apart from its consumer application, WhatsApp also offers a communication tool for businesses (named WhatsApp Business). Firms can:
- Set up business profiles with helpful information for their customers (such as an address, email addresses, or a link to their website)
- Labeling contacts for better categorization
- Automated messages and quick replies
- Broadcasts (similar to a newsletter)
The WhatsApp Business tool is geared toward small businesses. If a business has some greater scale, it can opt into using WhatsApp’s Business API.
The API endpoint allows them to integrate it into their existing business software.
WhatsApp is used by more than 2 billion people in over 180 countries across the globe. As such, it is the world’s largest communication platform.
The History Of WhatsApp
WhatsApp, headquartered in Mountain View, California, was founded in 2009 by Jan Koum and Brian Acton.
Koum was born in Kyiv, Ukraine, during the 1970s. He spent the transformative years of his childhood in Fastiv, a small town just outside of the Ukrainian capital.
Being of Jewish descent, Koum and his family often became the subject of anti-Semitic behavior. On top of that, the Soviet government was notorious for spying on its citizen, leaving the family with no room for privacy to express the predicament they felt being in.
In 1992, at the age of 16, Koum and his mother were allowed to immigrate to the United States where they ended up in Mountain View. Unfortunately, his dad was never allowed to enter the country and eventually died in 1997.
The mother-son-duo spent their first few years in a small two-bedroom apartment provided via government assistance. To make ends meet, Koum’s mother took up a babysitting job while Jan worked as a grocery store clerk.
A few years later, his mom was diagnosed with cancer and they continued to live off of her disability allowance. By that time, Koum was already heads deep into computers. He became a self-taught programmer by purchasing manuals from used bookstores and returning them when he was done reading (to save money).
In the mid-1990s, he enrolled himself at San Jose State University to pursue a degree in Computer Science. Koum ended up joining Ernst & Young as a security tester post-graduation. In 1997, EY assigned him to work on Yahoo’s advertising system where he ended up meeting Acton.
Acton’s path prior to their meeting couldn’t have been more different. He was born and raised in Michigan where his mother ran a freight-shipping company, allowing them to live a fairly comfortable life.
He ended up doing his Computer Science undergrad at Stanford and then joined Apple as a software engineer. In 1996, Acton became Yahoo’s 44th employee where he quickly climbed the corporate ladder.
The pair hit it off immediately and Acton convinced Koum to apply for a role at Yahoo. 6 months later, Koum joined the internet giant as an infrastructure engineer. He even dropped out of college (he was still attending San Jose State at the time) to completely focus on Yahoo.
Their relationship deepened in the years that followed. When Koum’s mother died of cancer in 2000, Acton immediately offered his support. He’d frequently invite Koum over to his house, on skiing trips, or to ultimate Frisbee matches.
While their bond became stronger throughout the years, their dissatisfaction with working at Yahoo grew alongside it. The majority of their time at Yahoo was spent on releasing Project Panama, the firm’s long-awaited advertising platform.
In the end, having worked on an advertising product for almost a decade, both Acton and Koum felt emotionally drained.
Their dislike for advertising products should eventually come back to haunt them, though (more on that later).
In 2007, a year after the launch of Project Panama, both Acton and Koum handed in their resignation. They embarked on a year-long hiatus, traveling around South America and enjoying games of ultimate Frisbee.
Then, around the beginning of 2009, Koum purchased his first-ever iPhone. He immediately realized that the App Store, which had just launched a few months prior, would spawn a whole new generation of businesses that would build on top of Apple’s ecosystem.
A mutual friend of Koum introduced him to Igor Solomennikov, a Russia-based iOS developer that would help him build the product’s frontend (while Koum was responsible for the backend portion).
A few weeks later, on February 24th, 2009 (which is also Koum’s birthday), he incorporated WhatsApp Inc. in California. WhatsApp, by the way, is short for “what’s up”, a phrase Koum found befitting for a messaging app.
Over the next months, Koum spent hours upon hours programming the app. Unfortunately, a plethora of bugs caused it to continuously crash. At one point, he was even ready to call it quits. Acton’s response was fairly blunt: “You’d be an idiot to quit now,” he stated. “Give it a few more months.”
Koum’s perseverance eventually paid off when Apple released push notifications in the summer of 2009. Each time one of the app’s users changed their status, all of their contacts would get a notification.
Eventually, people would start messaging each other through the app – from any place around the world. While this may sound dull in today’s hyper-connected world, WhatsApp’s introduction became a huge revelation and, for the first time, indicated the impact smartphones could have on our lives.
At the time, the only free texting application was BlackBerry’s BBM, which was solely accessible to users that owned a BlackBerry device. User growth started to snowball when Koum released an upgraded version of WhatsApp that included a messaging interface (i.
e. chats). Over 250,000 users downloaded the app within a matter of days.
To keep up with demand, Koum came to see Acton, who at the time was still unemployed and working on another startup idea, to convince him to join the project on a full-time basis. When Acton used the app for the first time, he immediately realized the limitless potential that a messaging platform like WhatsApp could have.
A few months later, Acton was able to convince 5 of his former colleagues at Yahoo to invest $250,000 in the startup’s first-ever seed funding round. The funding round, furthermore, granted him co-founder status and a significant stake in the company.
The money allowed them to hire a few more developers that would build WhatsApp products for the Android and BlackBerry operating system, respectively. Yet, they remained true to their frugal origins.
The team would share a warehouse with Evernote (who’d later take over the whole building and essentially kicked them out). They would wear blankets to keep them warm and used the cheapest Ikea furniture for work.
What became more abstruse was that the team found it necessary to put up an office sign. Instead, they’d tell job candidates to get to the Evernote building, walk around the back, find the unmarked door, and simply knock.
A bigger problem became the startup’s largest cost pool: SMS verifications. SMS brokers like Click-A-Tell would send the messages on WhatsApp’s behalf and charge them anywhere between $0.02 to $1 depending on location.
The team would occasionally change the app’s pricing structure from free to paid (equal to $1) to cover its cost. Yet, despite the fact that they charged users, WhatsApp would rise to become a top 20 app in the U.S. App Store by the beginning of 2011.
WhatsApp’s growth was solely based on word of mouth and the quality of the product they delivered. Deeply affected by their experience at Yahoo, the founders promised themselves to never derail the app with ads or other distractions. To that extent, Koum had a note in front of his desk reminding him of the exact same thing.
Being on top of the App Store world and building a high-quality product put the team on the radar of a lot of Silicon Valley investors. Yet, they were rejected right from the start. Acton’s fear, at the time, was that VC funding would lead to lesser decision-making power – and investors would force them to insert ads into the application.
One investor proved to be particularly enduring. Jim Goetz, Partner at Sequoia Capital, tried to get in contact with the founders for well over 8 months – without any success. Eventually, his persistent follow-ups led to a meeting at the Red Rock Café, a famous Mountain View workspace known to be home to many startup founders.
Goetz ensured the duo that he’d only act as a strategic advisor and not force them to make any business decisions they weren’t comfortable with. In the end, Sequoia was able to lead WhatsApp’s Series A round, which netted the company $8 million in additional funds.
The founders made sure to use the money to the best of their ability.
By 2013, WhatsApp had over 200 million monthly active users and a staff of 50 people. Sequoia would go on to invest another $50 million during WhatsApp’s Series B, which valued the company at $1.5 billion.
Ironically enough, when Goetz signed the check, Acton sent him a screenshot of the firm’s account balance, which was equal to $8.2 million. They simply needed the money ”for insurance”, as Acton recalled.
Being a highly capital efficient company with a rapidly expanding user base does eventually put you on the radar. In the spring of 2012, Koum’s email inbox was hit with the following subject line:
“Get together?”
The sender was no one other than Mark Zuckerberg asking the WhatsApp founder to have a chat over dinner. Over the next year, the pair got together for many more of these dinners, discussing the chances of a potential acquisition.
In mid-June 2013, when WhatsApp just crossed the 300 million user mark, the founders had a scheduled meeting with Google’s Head of Android Sundar Pichai (who now serves as the company’s CEO).
Pichai would even introduce the pair to then Google CEO and co-founder Larry Page. A few days before that meeting was bound to happen, a WhatsApp employee ran into Amin Zoufonoun, Facebook’s Director of Business Development and one of the brains behind the $1 billion Instagram acquisition.
He told him that Acton and Koum were supposed to meet Page in the next few days. Zoufonoun immediately went back to the office to speed up the acquisition process in order to avoid a last-minute counteroffer by Google. Yet, the founders still attended that Google meeting but actually didn’t even receive an offer from the search giant.
About 2 weeks after that meeting, on February 15th, 2014, Zuckerberg and Koum inked the deal. Facebook would pay $19 billion to acquire 100 percent of WhatsApp, paying $4 billion in cash, $12 billion in stock, and another $3 billion in stock grants if the founders would stay on at Facebook for at least 4 years. The price ended up rising to $22 billion due to the share-based components of the deal.
To make this even more of a Cinderella story, Koum signed the agreement on the doorsteps of his old welfare home in Mountain View.
Furthermore, the deal would make Koum and Acton overnight billionaires. Koum would make $6.8 billion after taxes while Acton would pocket $3 billion. Lastly, Sequoia walked away with $3.5 billion, which represented a 60-fold return on the firm’s $58 million investment.
Ironically enough, both Acton and Koum applied for roles at Facebook after they left Yahoo but were ultimately rejected. Now, they had not only a seat at the table but access to quasi-infinite resources. As a result, WhatsApp was able to triple its user base to 1.5 billion within 3 years of the acquisition.
On the outside, everything was looking great but the tension between Facebook and WhatsApp executives began to rise soon after.
Sheryl Sandberg, Facebook’s Chief Operating Officer at the time, as well as many other Facebook executives started to push WhatsApp’s founding team to ease the end-to-end encryption it became known for.
Furthermore, they wanted to include targeted ads within the app, a concept that both Acton and Koum opposed heavily (they even had a clause in their contracts that granted them accelerated payouts if Facebook insisted to include ads).
A few disagreements between the company’s employees also popped up. For instance, Facebook employees issued their dissatisfaction about the fact that WhatApp’s desks, which were brought over from their Mountain View location (WhatsApp moved into Facebook’s headquarters after the acquisition), were larger than the standard desks Facebook employees were equipped with.
WhatsApp also negotiated for nicer bathrooms and had conference rooms which permitted Facebook employees from entering.
WhatsApp, on the other end, wasn’t without fault either. When the founders were tasked with replicating Snapchat’s Story feature, which was a key differentiator of its growth model, into WhatsApp, Acton and Koum used that assignment as an excuse to delay exploring other revenue-generating avenues.
Eventually, the mounting tension between the two camps became irreparable. On September 17th, 2017, Acton announced he would leave WhatsApp. Koum’s departure came just seven months after (in April 2018). Due to their premature exit, Acton and Koum gave up $900 million and $400 million in stock compensation, respectively.
To make matters worse, Acton publicly denounced Facebook, criticizing the company on how it handled its user data in the wake of the Cambridge Analytica scandal. He even pushed people to stop using Facebook by publicly supporting the #DeleteFacebook movement.
It is time. #deletefacebook
— Brian Acton (@brianacton) March 20, 2018
Facebook, that same year, was even slapped with a $122 million fine by the European Union due to providing “incorrect or misleading information” in regards to the acquisition.
While all these incidents painted a gloomy picture of how miserable life as a Facebook-owned property can be, it did not seem to affect WhatsApp’s usage growth at all.
Particularly India, with its 1.37 billion inhabitants, became one of the major growth markets.
WhatsApp’s popularity among Indians allowed many businesses to flourish by offering products and services to millions of smartphone users via the app’s Business tools. Unfortunately though, just like its mother company, WhatsApp became a breeding ground for spreading fake news.
In 2017, 17 men were killed after false rumors of their attempts to kidnap kids from a village spread on the app. WhatsApp introduced various measures, such as limits on message forwarding and full-page newspaper ads warning about these rumors, to combat the spread of fake news on its platform.
In some instances, WhatsApp (albeit unintentionally) even caused political leaders to be ousted. In October 2019, Lebanon’s Prime Minster Saad Hariri, amidst intense public pressure, was forced to resign from his position after proposing a 20 percent tax on the first WhatsApp call users made in a day.
And the bad news did not end there.
In January 2021, WhatsApp announced that it would roll out a new privacy policy which forced users to share data with its parent company Facebook.
While it turned out to be a misunderstanding (Facebook already gathers WhatsApp data in an encrypted way, so user information remains private), the damage was already done.
Many of its users flocked to other messaging platforms, such as Signal (as promoted in a tweet by Elon Musk), Telegram, or Viber. Initially, the company said it would remove users who wouldn’t accept the new terms. However, the company reversed its course days before the supposed go-live on May 15th, 2021.
In fact, the company has now doubled down on privacy-related changes and other features that often mimic those of Telegram and such. For instance, in June, the platform introduced multi-device support, which allows users to message on various devices at the same time. Other features include encrypted video chats as well as disappearing photos and videos (August 2021).
Unfortunately, not everyone seemed to believe in WhatsApp’s noble intentions. In September 2021, Irish authorities imposed a €225 million (~$267 million) fine on WhatsApp for failing to tell some users how much data was shared with Facebook. The fine was the second highest ever issued under Europe’s General Data Protection Regulation (GDPR), which was first introduced back in May 2018.
WhatsApp, a a result, updated its privacy policy for users in Ireland and Europe in November. Two months later, in January 2022, WhatsApp rival Signal announced that co-founder Brian Action would serve as the messenger’s interim CEO.
Today, WhatsApp is widely considered to be the world’s largest communication platform. Over 100 billion messages are now being exchanged on the platform – every day. WhatsApp currently employs well over 1,000 people in 6 office locations across 4 countries.
How Does WhatsApp Make Money?
WhatsApp makes money by charging companies for access to its Business API as well as transaction fees from payments.
But before we go into more detail, let’s take a closer look at the firm’s previous monetization efforts.
As earlier stated, WhatsApp used to monetize its customers via a subscription model. Users paid $1 per year to be able to use the app. That would be equal to a $2 billion revenue run rate given WhatsApp’s 2 billion user base.
In 2016, 2 years after the acquisition, Facebook decided to ditch the $1 fee. The underlying strategy was to continue focusing on user growth and help WhatsApp become the ubiquitous leader in the messaging space.
That also meant ditching any plans to insert ads into the product. Whilst Facebook’s Messenger product does offer in-app advertising, its executives have decided to work with businesses to monetize WhatsApp.
Facebook, now known as Meta, has since rolled out various services to monetize WhatsApp. Let’s take a closer look at each of WhatsApp’s monetization channels.
Business API
In 2018, WhatsApp launched its Business API, which became the first continuous effort to monetize the app post-acquisition.
Business are charged on a per-message basis. However, the first 24hrs of a conversion incur no cost. Every message after that 24-hour window costs anywhere between $0.0085 and $0.0058 per message – depending on the total message volume and country of jurisdiction.
The first 1,000 conversations each month come at no cost. Those conversations can either be initiated by the user or business itself. A user-initiated conversion is substantially cheaper than if a business starts one.
The 24-hour limit is supposed to encourage businesses to improve and speed up their reply time. This, in turn, increases the customer’s satisfaction and thus improves the likeliness of both parties (customer and merchant) to continue using WhatsApp.
Furthermore, WhatsApp partners up with other companies, such as the cloud communication platform Twilio, to deliver its API.
Meta CEO Zuckerberg, during a company-related event in May 2022, announced that WhatsApp is working on expanding the functionality of its Business API.
Features in development include the option to monitor ongoing chats across 10 devices and enable click-to-chat links that businesses can adjust and post on their own websites.
Payment Fees
WhatsApp has been working on a payment product since 2018. In June 2020, it finally launched a payment service in Brazil that allowed users to pay each other (mirroring Venmo and Zelle) as well as other businesses on the platform.
Unfortunately, around 10 days later, Brazil’s central bank suspended the launch, stating that it wanted to “preserve an adequate competitive environment” within its mobile payments industry. Mastercard and Visa, WhatsApp’s payment partners, were asked to suspend any money transfer within the app.
While the failed launch was a tough pill to swallow, it hasn’t stopped the company from pursuing the payment concept.
In November 2020, it enabled P2P payments in India, the firm’s largest market by user count. Business payments, in which WhatsApp would receive a portion of the order value, are expected to follow in the next few months.
Also, in May 2021, Brazil lifted its payment ban, adding another country to the mix.
Luckily, sending payments to one of your friends or family members remains free of charge. WhatsApp monetizes its payment feature on the business side.
Whenever you pay a merchant using WhatsApp Pay, that business is being charged with a 3.99 percent transaction fee.
Currently, 100 million users in India are allowed to use the product. The National Payments Corporation of India (NPCI) continues to put a cap on the number of users WhatsApp can onboard, which is expected to increase over time.
Users are, furthermore,, incentivized to use the service through cashback rewards. Whenever someone pays a merchant via WhatsApp Pay, he or she will receive a cashback reward of up to $0.40.
WhatsApp Funding, Valuation & Revenue
According to Crunchbase, WhatsApp has raised a total of $60.3 million across 3 rounds of venture capital funding.
The company’s only investor throughout its startup time was Sequoia Capital, with partner Jim Goetz leading negotiations.
The last time WhatsApp valuation was publicly disclosed occurred during its acquisition by Facebook. The tech giant paid a whopping $19 billion to acquire a 100 percent stake in the company.
Facebook has furthermore decided to not disclose any revenue it generates from WhatsApp. Instead, any revenue figures are included in the firm’s overall income figures.
How Does WhatsApp Make Money?
WhatsApp was founded in 2009 by Brian Acton and Jan Koum as an alternative to pricey SMS services. The app allows users to upload their contact book and message anyone who has the app installed, at no cost. It is available for iPhones, Androids, and desktops. If it's free-to-use, how does WhatsApp make money?
Meta (META), formerly Facebook, purchased WhatsApp in February 2014 for $19 billion and according to the 2014 Facebook Form 10-Q, during the nine months preceding Sept 30, 2014, WhatsApp generated revenue of $1.29 million.
In 2018, WhatsApp co-founder and Facebook Inc.
director Jan Koum announced his departure from Facebook. Media reports indicate that Koum decided to leave after a disagreement with the company over its use of user data and its desire to allow advertisements on WhatsApp. Koum, along with his co-founder Brian Acton, has long been an advocate for the privacy of WhatsApp users.
In March 2022, WhatsApp had more than two billion users in 180 countries and was Meta Platforms, Inc.'s (formerly Facebook) second-biggest property, after its namesake app. It surpassed Instagram Facebook Messenger, the third- and fourth-biggest properties. Read on to see how WhatsApp makes money.
Key Takeaways
- WhatsApp is a mobile app that allows users to message and call each other over the Internet.
- WhatsApp was founded in 2009 and bought by Meta (formerly Facebook) in 2014 for $19 billion.
- Meta's second biggest property is now WhatsApp, after its Instagram and Facebook Messenger service.
- The way WhatsApp used to make money was through a subscription model.
It cost $1 to download and then $1 a year going forward. - Meta eventually removed the $1 fee and made WhatsApp a free service, with the idea that consumers would communicate with businesses through it and businesses would pick up the cost.
- Revenue in 2021 for WhatsApp was $8.7 billion.
One Dollar at a Time and Beyond
The short answer used to be $1 at a time. In some countries, the app used to cost about $1 to download; in others, the first year is free, but each subsequent year costs $1; in other words, WhatsApp had a subscription model. At the peak under this model, it had about 700 million users worldwide; yearly revenue could thus be estimated at $700 million per year at that time.
In January 2016, Facebook revealed in a 10-Q filing that because WhatsApp was monetized in "a very limited fashion," it may not be generating meaningful revenue in the long term, hinting that the strategy would change. Shortly after, WhatsApp announced in a blog post that the era of subscriptions had come to an end and the messaging app would now be free to use.
There are still no ads in the app, however. "Starting this year, we will test tools that allow you to use WhatsApp to communicate with businesses and organizations that you want to hear from," the company wrote at the time. The goal is to have people communicate directly with their banks, airlines, etc. over the app, while the businesses pick up the bill previously paid through subscriptions.
Though WhatsApp's financial statements aren't public (Meta doesn't break down its revenue by company), Forbes estimated potential revenue to be $27–$29 billion by Q1 of 2022. As of March 2022, WhatsApp had over two billion users.
WhatsApp Business, the business platform of the messaging app, provides a host of tools for businesses to access company insights and measure metrics, making it an attractive tool for businesses.
Focusing on Growth
WhatsApp is globally popular—the top three countries are: India with 390 million users, 108 million in Brazil, and 75 million in the United States.
With SMS apps, growth is exponential; when one person in a social group downloads and advocates using the app, many new users download the app to communicate with the original person. These new users then encourage other members of their other social groups to use the app.
By increasing market penetration, the app becomes indispensable and the user base grows.
Information from StatistaIs It Really About the Money Though?
Industry insiders have speculated that part of the rationale behind acquiring WhatsApp was for Meta to access user’s behavioral data and personal information.
With location sharing data, 100 billion messages sent per day, and access to users' entire contact lists, Meta has access to a ton of personal information—all uploaded and saved on its servers. While Mark Zuckerberg has previously promised that this data won’t be used to improve consumer targeting in Meta ads, it will be unless the user changes the settings to not share information with Meta.
End-to-End Encryption Controversy
WhatsApp, as well as other messaging providers (including Apple), have been in hot water with governments around the world after it was determined that terrorists used apps to communicate before and during attacks.
Governments and counter-terrorism agencies wanted the companies behind these apps to share the encryption key to gain access to messages sent and received by the terrorists. The companies, however, refused to oblige. This led to WhatsApp's adoption of end-to-end encryption, which prevents anyone, including WhatsApp, except the sender and receiver from gaining access to the data shared on the app.
How Many Users Does WhatsApp Have?
According to industry estimates, WhatsApp has more than 2 billion users worldwide as of 2022.
Is WhatsApp Really Secure and Private?
Yes, WhatsApp messages, including text, images, and other media, are secured through end-to-end encryption. This means that they cannot be intercepted or read during transmission.
Does WhatsApp Make Money?
Yes, WhatsApp generated more than $8.7 billion in revenue in 2021 for its parent company, Meta (formerly Facebook).
The Bottom Line
WhatsApp has become one of the most popular messaging services in the world with only room to grow. Whether you believe that Meta overpaid for WhatsApp or not, the fact is that the app has a growing revenue stream with endless possibilities that will allow it to bring in more revenues over time.
HOW DOES WHATSAPP MAKE MONEY? Income model
WhatsApp is a messaging application that allows users to communicate with each other through text, audio or video.
WhatsApp makes money by charging fees for its Business API offering and transaction fees for WhatsApp Pay.
Here we take a look at how WhatsApp makes money in the competitive world of instant messaging.
What is WhatsApp and how does it work?
WhatsApp is a messaging software that allows users to interact through text, audio and video.
WhatsApp is available through apps for tablets and smartphones (available on Android and iOS devices) and a web app (called WhatsApp Web).
Users can communicate with each other individually (in private chats) or in groups of up to 512 people.
The WhatsApp platform is fully encrypted, which means chat users can only read messages. nine0003 Users can send emoticons, GIFs, voice messages, images, videos, and even documents in addition to text messages. They can also reply to text messages.
Users who want to share their unique moments can do so using the WhatsApp Stories feature. These moments are then made available to anyone who has kept a contact within 24 hours.
In addition to its consumer app, WhatsApp provides a commercial communications solution (called WhatsApp Business). Companies can:
- Create business profiles that contain useful information for your customers (such as address, email addresses, or a link to their website).
- Contact tagging to improve categorization
- Automatic messages and quick replies
- Broadcast (similar to newsletter) (similar to newsletter)
WhatsApp Business is designed for small businesses.
If a company is larger, it can use the WhatsApp Business API, which provides an API endpoint that allows it to be integrated with current business software. nine0005
WhatsApp is used by over 2 billion people in over 180 countries. Thus, it is the largest communication platform on the planet.
Does Facebook profit from WhatsApp?
Because they control the WhatsApp brand, any money generated from the messaging program goes directly to Facebook and its shareholders.
Facebook bought Whatsapp in 2014 for a staggering $19 billion. It goes without saying that with such a significant investment, Facebook will want to monetize the platform as much as possible. nine0005
Facebook was already the market leader in "free" platforms, and the inclusion of Whatsapp further solidified its position.
Facebook has experience buying and promoting successful brands; it acquired Instagram in 2012 and has seen its user base skyrocket.
How does WhatsApp make money without ads?
WhatsApp now has various sources of income that bring money to the corporation.
This revenue generation prevents in-app ads and ensures that millions of users have free access to the platform. nine0003 Here are the top three sources of WhatsApp revenue:
- WhatsApp Business API
- WhatsApp Payments
- Go to WhatsApp Advertising
To better understand them, let's take a closer look at WhatsApp's existing revenue streams.
#1. WhatsApp Business
WhatsApp Business allows businesses to serve their customers on WhatsApp by creating product catalogs and providing customer service. While the business app is free to use, WhatsApp monetizes the service through the WhatsApp Business API. A month after the launch of the WhatsApp Business API, well-known Internet companies such as Netflix, Uber, Wish and 100 others began testing the service. nine0005
WhatsApp made money in the early days of the WhatsApp Business API by charging registered businesses for late responses. Businesses can reply to user messages for free within 24 hours, but will be charged per message for a delayed reply, which varies by country.
The new WhatsApp for Business API allows organizations to have the first 1,000 chats for free, but after that they have to pay a certain amount for communication, which varies by country. nine0005
No. 2. WhatsApp Pay
In recent years, WhatsApp has shown a strategic trend towards service monetization through business, and WhatsApp Pay is another example of this. While WhatsApp Pay is a free service for end users, businesses must pay a flat fee of 3.99% per transaction. At the time of publication, WhatsApp Pay was only available in India and Brazil.
#3. Click to WhatsApp Indirect Ad Revenue
In addition to WhatsApp For Business and WhatsApp Pay, WhatsApp also makes money through Click to WhatsApp ads, which are not ads seen on Facebook or WhatsApp but redirect people from Facebook to WhatsApp. nine0003 Since these ads do not appear on the WhatsApp app, it would be wrong to attribute their revenues solely to WhatsApp; instead, it's one of the ways Facebook is using WhatsApp to generate revenue.
What is the price of WhatsApp Business API?
WhatsApp Business is a powerful and sophisticated subscription product.
The Business API is an important source of revenue for WhatsApp, and the quality of the service only improves over time as more companies participate in it. nine0005
There are a few API related fees that any business owner should consider before investing. Here is a brief overview of the most important ones:
#1. Monthly fee:
To access the API, you must work with one of the official WhatsApp providers.
There are several different providers and their prices vary greatly. Some companies charge £75 per month for the service, while others charge around £500.
No. 2. Customize fee:
Depending on the provider you have chosen for your Business API, you may be charged an additional installation fee. This is usually determined by the number of numbers you want to add to the network.
It's important to note that just because a service doesn't charge an installation fee doesn't guarantee it will be the cheapest in the long run.
#3. Call charges
Previously, WhatsApp charged business users based on the number of messages they sent to colleagues. This fee is now determined per conversation. nine0003 This is a positive adjustment as it discourages users from cramming too much information into one WhatsApp message.
Whatsapp makes a profit?
While most of its users are free, WhatsApp makes money.
Most of these revenues are generated by the premium models developed by WhatsApp for business. However, WhatsApp owner Facebook believes that the messaging network has much more to offer than direct monetization. nine0005
WhatsApp is just another social network added to the Facebook portfolio.
By operating multiple websites and apps, Facebook can attract and change customers among them, increasing long-term revenue.
With features such as end-to-end encryption and always-on servers, WhatsApp is likely to dominate the instant messaging software market for years to come.
How many people use WhatsApp? nine0007
According to industry forecasts, WhatsApp will have over 2022 billion users worldwide by 2022.
Is WhatsApp really safe and private?
Yes, WhatsApp messages, including text, photos and other content, are fully encrypted. This means that they cannot be intercepted or read during transmission.
Whatsapp makes a profit?
Yes, WhatsApp's parent company, Meta, made over $8.7 billion in sales in 2021 (formerly Facebook). nine0005
How has WhatsApp made money in the past?
Before the free model rolled out, WhatsApp made money from a paid subscription. WhatsApp paid consumers £0.69 a year to use the service.
This may not seem like much, but since WhatsApp had 250 million users before switching to a free model, it is clear that they were taking a significant risk in making this transition.
Excitement, of course, paid off, and it became clear that the free model with additional paid services is the most profitable for the platform.
nine0003 Although WhatsApp is free, the popular WhatsApp scam tries to convince people to pay or provide banking information.
How is Whatsapp going to make money in the future?
It is not clear if WhatsApp intends to integrate more monetization into its platform in the future.
We know that the platform will continue to support its Business API tool and expand the payment mechanism to new locations.
In particular, the payment mechanism may become a significant source of income for the organization in the future. nine0005
Making payments directly from an instant messaging network has many applications and is undoubtedly a service that people immediately welcome.
It has also been reported that WhatsApp will start displaying ads in the app status area.
This would be a direct source of income and the corporation is probably under pressure to realize it.
WhatsApp's economic model is very unusual, and investors will probably want to see more proven and reliable monetization tactics implemented in the service.
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How much money does WhatsApp make?
At the time of the previous calculation, WhatsApp should have had $5 billion in annual revenue.
This came after the platform dropped its $0.99 per year price in favor of the current free scheme.
However, given that most users don't pay for the service, it's clear that WhatsApp For Business and Pay do it admirably.
With this level of success, it is unlikely that WhatsApp will ever return to a subscription model for regular users. nine0003 And it's not just direct income from WhatsApp. If Facebook can get people to use WhatsApp, it can get people to use their other services as well.
WhatsApp Funding and Value
WhatsApp Inc. attracted the attention of venture capitalists and technology investors immediately after its debut.
Sequoia Capital invested $8 million in the platform in 2011 and was one of the site's early sponsors. In 2013, Sequoia invested an additional $52 million. nine0003 Sequoia's investment paid off when Facebook acquired WhatsApp in 2014.
Of course, since WhatsApp was under the umbrella of a large Internet corporation, WhatsApp has had little problem with funding.
Creating a proper score for WhatsApp is a challenge, especially given how closely it ties into other metaservices.
With that said, if WhatsApp went public today, it would likely cost significantly more than 19billion dollars paid out by Facebook, which at the time was a staggeringly huge deal.
End-to-End Encryption Controversy
WhatsApp and other messaging services (including Apple) got into trouble with governments around the world after they discovered terrorists were using communication apps before and during attacks.
Governments and counter-terrorism authorities have asked the corporations behind these applications to disclose the encryption key to access terrorist texts sent and received. However, the corporations refused to comply. This prompted WhatsApp to implement end-to-end encryption that prevents anyone, not even WhatsApp, from accessing the data transferred within the app, other than the sender and recipient.
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Conclusion
WhatsApp has become one of the most popular messaging platforms in the world, with plenty of room for expansion. Whether you think Meta overpaid for WhatsApp or not, the truth remains that the app has a growing revenue stream with limitless potential that will allow it to generate more revenue over time.
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Whatsapp started in 2009 and they have flourished ever since. If you, like me, were curious, you must have wondered this question: how does WhatsApp make money? Many people want to know how they started small and became one of the biggest messaging apps in the world.
Well, I did a thorough research and found some really interesting things about this popular messaging app.
For those who read this and ask what is WhatsApp? Here is the quick answer:
WhatsApp is a messaging app for friends and family.
You will get fast, easy and secure messaging and free calls. Download WhatsApp today to exchange messages, photos, videos and voice messages with your contacts. Before I answer the question: How does WhatsApp make money? Let's find out the brief history of this messaging app.
How did WhatsApp come about?
Jan Caum and Brian Acton launched WhatsApp in 2009 for a reasonyear. They worked with Yahoo for 9 years, from 1998 to 2007. When they worked with Yahoo, they tried to find a job on Facebook, but they constantly got rejected.
So, in 2009, these two had a brilliant idea after acquiring an iPhone, and they realized that the app industry was seriously undervalued. And they were right, because then the Apple store existed for only six months.
They got together and created WhatsApp, and the first version they released was not yet a messaging app. You could only update your status, which other people could see. They really did a great job when Apple launched Push Notifications in the same year that WhatsApp was born.
The app was gaining momentum and you could ping users when anyone in their contact list updated their status. Users liked the feature so much that they started using it to ping each other, which led to the app turning into a mobile instant messaging service. nine0005 The messaging tool now at the heart of the service was included in WhatsApp version 2.0, and the number of users increased to 250,000 in 2011. By the start of 2011, WhatsApp had risen to the top of the 20 Apple App Store app list.
As the app grew in popularity, its founders attracted the attention of potential investors. The creators were strongly opposed because they intended to create an ad-free service and were concerned that taking on venture capital would force them to sacrifice their ideals. nine0005
The founders hated ads and were against ad revenue, according to a 2012 WhatsApp blog post titled "Why We Don't Sell Ads."
Regarding their reluctance to take on venture capital, WhatsApp's founders accepted $8 million from Sequoia Capital in April 2011, but only after they were guaranteed the service would remain ad-free.
By February 2013, WhatsApp had grown to nearly 200 million active users and Sequoia invested another $50 million worth $1.5 billion. But if there were no ads and plans to include them in the future, how did WhatsApp make money in its early days? nine0005
In its early days, WhatsApp used a freemium business model where the app was free for a year to attract users and then paid a tiny annual membership fee of $0.99 for continued use.
Facebook buys WhatsApp
WhatsApp's success through 2016 was the least of the good things that happened to Ian and Brian. In 2014, Facebook acquired WhatsApp. But they ran into trouble after selling the Facebook messaging app. Facebook has withdrawn from its agreement not to advertise on WhatsApp. nine0005
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Brian promoted the idea that users would be charged after sending a certain number of messages, but Facebook rejected the idea and this led to Brian leaving and in 2018 Jan followed his example.
How does WhatsApp make money?
WhatsApp makes money from three sources: WhatsApp for Business, WhatsApp Pay, and Click to WhatsApp ads.
WhatsApp for business
WhatsApp for Business allows you to send and receive WhatsApp messages on your computer. Collect reviews, close deals, listen to your customers on all the devices they use every day. So how does WhatsApp make money from WhatsApp for Business? WhatsApp makes money by billing registered companies for delayed responses. Businesses are allowed to respond to user messages for free within 24 hours. As businesses and customers become accustomed to using WhatsApp, the company may charge for messages at a set rate. nine0005
WhatsApp Pay
What is WhatsApp Pay and how is it going to make money on WhatsApp monetization? It has been a long time since WhatsApp introduced its WhatsApp-Pay payment service in India and Brazil. The reason the service was introduced so quickly in India could be the success of Paytm, another popular chat app that has made its way into our daily lives.
But there is a difference between both applications. WhatsApp pay is a payment feature that the app adds to help customers use it. This will help increase in-app customer payments, which could lead to more revenue for WhatsApp. nine0005
Click to go to WhatsApp ads
You can add a Send Message button to your Facebook or Instagram ads with ads that go to WhatsApp, which starts a chat thread in the WhatsApp Business app.
How much does WhatsApp earn?
In the nine months leading up to September 30, 2014, WhatsApp generated only $1.28 million in revenue. Forbes predicts that WhatsApp will generate $5 billion in revenue per user by 2020, bringing Facebook to $5 billion in revenue. However, the predictions turned out to be wrong, as WhatsApp was expected to have 2020 billion users per month by 2020, a figure that WhatsApp reached by mid-2017. Even if the income potential of this application is still far from being realized, the product can be expected to contribute more to its parent company's basic income.
