How does whatsapp make money reddit
How Does WhatsApp Make Money?
by Aashish Pahwa
WhatsApp was developed by Jan Koum and Brian Acton in early months of 2009 as a status update application (hence the name WhatsApp). It was further updated to Whatsapp 2.0 which transformed it into an Instant Messaging Application and started the real story.
This Facebook-owned IM Application now provides service to more than 1 Billion users all over the world. But the question of how does Whatsapp make money has been in the minds of everyone ever since the beginning as WhatsApp proudly expresses its views against native advertisements and hasn’t been charging its users for a long time. There surely are some big plans in the minds of developers (and Facebook) regarding its revenue model.
How does WhatsApp Make Money?
WhatsApp doesn’t earn revenue through advertisements. The founders hated advertisements and created this ad-free platform focusing just on great user experience and interface.
They wanted to create an instant messaging platform for the users and not for the big companies to place ads. But at the same time, they had to pay their bills too. So they decided to come up with the paid version of the application where they charged an annual fee of $1 from the users.
Initial Revenue Generation Strategy
WhatsApp got its first round of funding of $250k by five ex-Yahoo! friends who were granted a cofounder status.
The second and third round of funding was carried by Sequoia Capital which invested a total amount of $60 million ($8 million in 2011 and $52 million in 2013) in WhatsApp Inc. This was the only source of income for the 50 staff members of WhatsApp. There wasn’t much expenditure involved in running the application; the primary cost included server costs and costs relating to sending a verification code to the users.
This is why WhatsApp waved off the $1 subscription fees.
The strategy of the founders was to position the brand as a synonym for an instant messaging application.
This required them to capitalise on the network effect.
This strategy of creating a network first and money after proved to be fruitful. After two long years of being wooed by Facebook’s CEO Mark Zuckerberg, WhatsApp was acquihired by Facebook on February 2014 for $19 billion and all the employees were put to Facebook payrolls including Koum, who is now a part of Facebook’s board.
WhatsApp’s Revenue Model (Facebook’s Strategy)
Facebook acquired WhatsApp in 2014 for $19 billion and this opened many new doors for the application. Even the answer to ‘how does WhatsApp make money?’ changed after the acquisition
After the acquisition, Facebook introduced some really strategic plans for WhatsApp’s revenue model.
WhatsApp Business
Facebook had new plans for WhatsApp. The company launched WhatsApp Business application which lets users build their business profile and become a verified business on WhatsApp. The verified businesses can create their business profile along with certain important links to their website or facebook page, set up autoresponders, can even link their landline numbers with WhatsApp and can even integrate the WhatsApp for Business API with their product offering.
The WhatsApp Business application is currently free to download and use for all businesses. WhatsApp, however, makes money through WhatsApp for Business API.
WhatsApp for Business API
The company extended its business functionality by launching its first revenue-earning product – WhatsApp Business API. Now, if you don’t know what an API is and how it works, I’d suggest you read our article on API economy first.
WhatsApp API lets the businesses integrate WhatsApp for Business with their systems to reach out to customers through notifications and deal with their queries automatically.
To prevent ad spam, the company restricted the ability to send messages. Businesses can only send messages to people who have contacted them first, but the API also helps them programmatically send shipping confirmations, appointment reminders or event tickets to their customers. The company is already working successfully with clients like Booking.com, Wish, etc.
Now, how does WhatsApp makes money through API?
Well, WhatsApp has developed a really strategic revenue generation plan for this product.
It charges businesses for slow replies.
This means that the businesses are able to respond to messages from users for free for up to 24 hours, but have to pay a fee for every message sent after 24 hours. The charge is fixed but is different for different countries.
The businesses can also choose to reply manually through their own tool or apps like Zendesk, MessageBird or Twilio.
Now, most of you must be thinking that the businesses can always use their WhatsApp for Business application to reply late to the customer inquiries. No matter how simple this solution sounds, this technique doesn’t suite businesses dealing with millions of users (airline tickets, travel tickets, movie tickets, banks, etc.).
Moreover, you cannot use API on any number already associated with WhatsApp.
you need a fresh number to install the API.
Payments
WhatsApp has introduced a payments option (P2P payments) within the application for Indian users which will further boost its position in the market and will make it a preferred application for sending money (just like Venmo in the USA). This will further benefit WhatsApp business in the company’s biggest market.
During the recent F8 conference, Mark Zuckerberg also disclosed his future plans to release the WhatsApp payments feature to the rest of the world pretty soon. This will open gates to many more businesses relying on the platform the company capitalising on the network effect.
Future Revenue Earning Strategies
It looks like copying Snapchat’s features wasn’t just to steal its consumer base, WhatsApp is now planning to copy its revenue-earning strategies as well. According to the Economic Times, the company has plans to let businesses use the status feature, where text, photos, videos and animated GIFs can be shared for 24 hours, to advertise and promote their business.
Go On, Tell Us What You Think!
Did we miss something? Come on! Tell us what you think of this article on how does WhatsApp make money in the comments section.
Aashish Pahwa
A startup consultant, digital marketer, traveller, and philomath. Aashish has worked with over 20 startups and successfully helped them ideate, raise money, and succeed. When not working, he can be found hiking, camping, and stargazing.
Categories Brand Study, Business ModelsHow Does WhatsApp Make Money? Business Model of WhatsApp
WhatsApp is a popular free messaging app. So, if the service is free, how exactly does WhatsApp make money for Facebook, it’s parent company? Turns out that the platform has two main sources of revenue.
WhatsApp makes money via an enterprise version of WhatsApp called WhatsApp Business, used by companies for sales and support, and WhatsApp Payment, a way to send money to other users that charges the receiver a fee.
Founded in 2009 by Jan Koum and Brian Acton, the messenger service promised users free domestic and international messaging over the internet.
Free messaging was preferable to many cell phone users over costly or geographically limited SMS messaging.
The service quickly took off. It amassed 450 million users by the time Facebook, now Meta Platforms, bought the company in 2014 for $21.8 billion.[1]
As of April 2022, WhatsApp boasted 2.26 billion global users.[2] While many might believe that the United States is the region with the most WhatsApp users, they would be wrong. The geographic region with the highest number of WhatsApp users is India. The platform is also the most used messaging app in over 100 countries. [3]
What is WhatsApp & How Does It Work?
Apart from Facebook and Instagram, WhatsApp is Meta’s biggest platform. The messaging service allows users to do things like make voice and video calls, send messages to individuals or groups, send voice messages, and share media such as videos and images.
Billions of people use WhatsApp to communicate with local and global contacts in order to avoid using their cellular data or to avoid costly international calling or messaging fees.
The platform has no ads and is free. WhatsApp also promises that all messages sent have end-to-end encryption.
To sign up, users input their Facebook login and either input their contacts or import them from their phone’s address book. They can then start chatting with friends one-on-one or in groups.
While WhatsApp has long been a popular messaging service, the platform did experience what many in the media called a ‘mass exodus’ in 2021. That’s when WhatsApp updated their privacy policy. Many believed the new policy didn’t protect user privacy. It also used confusing language around where encrypted messages were stored. [4]
Millions were said to have left the platform around that time and downloaded apps like Signal and Telegram because of their more robust privacy policies. [5]
Business Model of WhatsApp
WhatsApp’s product is pretty straightforward – it offers a free messaging service. But the way WhatsApp makes money is not as easy to discern.
With no advertisements or user fees, just how does WhatsApp generate revenue?
Originally, WhatsApp had a freemium business model. That means that users got their first year on the app free and then were asked to renew for a small annual fee. While in-app advertising might seem to be an obvious alternative given Meta’s robust advertising business, WhatsApp chose a different route.
The platform makes money through two services: WhatsApp for Business and WhatsApp Payments.
This is a departure from the monetization model of similar messaging services. For example, the popular messaging service WeChat monetizes its app through value0added services and advertising, in addition to Payments.
It is believed that because of that, WeChat has a higher average revenue per user (ARPU) than WhatsApp. It’s been estimated that Whatsapp’s ARPU is just $1 whereas WeChat’s is $7.[6] WeChat, however, only has 1.24 billion users, most of which are based in China whereas WhatsApp has a larger and more geographically diverse user base.
[7]
As WhatsApp business model is global, much of the revenue it generates comes from international markets. For example, the WhatsApp Business app is particularly popular in Indonesia, India, and Brazil. [8] Those are also the messaging platform’s top three markets with the United States coming in fourth.
WhatsApp has considerable personnel and hosting. Indeed, it costs a lot of money to run an app with such a high volume of daily users. While Meta does not separate and differentiate WhatsApp’s revenue from its general revenue, it has been estimated that the platform brough in $8.7 billion in 2021, up from $5.5 billion in revenue in 2020.[9]
How Does WhatsApp Make Money?
WhatsApp makes money in two different ways: through WhatsApp Business, a messaging service for enterprise, and WhatsApp Payments, a payments service that allows users to send money to others within the app.
WhatsApp’s business model is unconventional for a messaging service with so many users since they do not make money via advertisements.
WhatsApp Business
Meta allows users to access WhatsApp for free since its primary monetization strategy is around business use of the app. That’s why the company created a WhatsApp Business API. It allows enterprise companies and other apps to use the platform to message customers as part of their sales and support programs.
The API, aimed at medium and large businesses, allows them to automate their WhatsApp messaging communications with things like automated replies, interactive messaging, and chatbots. It’s offered as an API instead of a standalone platform or app because it’s designed to integrate with companies’ existing tech stacks and customer service management program.
This allows customers to use other technology to provide more interactive communications and to keep records of their interactions with customers in conversation intelligence programs that record conversations with customer. It also allows for integration with popular customer relationship management software like Salesforce and HubSpot.
[10]
Meta also offers small businesses the use of the WhatsApp Business app free of charge. The free version has more limited features and is only built for a low volume of messages. Only one user profile can be created on the app.
The largest per country share of Meta’s revenue from WhatsApp Business comes from countries where WhatsApp is more popular. Those include Brazil, India, and Indonesia.[11] That’s not surprising. With such widespread use of the service, companies want to be able to connect with customers via WhatsApp and are willing to pay to be able to do that easily and at scale.
Companies are charged for the use of WhatsApp based on how many messages they send. The first 1,000 conversations per month are free. Rates then depend on where the company is based. They charge different rates based on your region and charge fees in different currencies.
In North America, the cost for a business-initiated conversation is $0.
0647 and the cost for a user-initiated conversation is $0.0088. Rates are highest in the Netherlands where a business-initiated conversation costs $0.1485 and a user initiated conversation costs $0.0891.[12]
WhatsApp Payment
WhatsApp Payment is one way that Meta monetizes its users directly. It’s simple to get started. Users simply add a bank account, verify their account, and then start transferring money. Users can send and receive money via WhatsApp Payment from anyone who uses UPI-based apps.
Those who send money can do so without any fees. However, those who receive funds have to pay a percentage of their payment to WhatsApp.
WhatsApp Payment is not available in all regions that WhatsApp operates. They only provide the service in India and Brazil. However, WhatsApp does have a digital wallet called Novi that allows people in the United States to send money directly in a WhatsApp chat.[13]
While WhatsApp Payment currently has a limited rollout, Meta claims to be working on bringing the feature to other countries.
Funding, Valuation & Revenue
WhatsApp is owned by Meta and is a profitable subsidiary. Prior to being acquired by Facebook in 2014 for $21.8 billion, WhatsApp received funding from one sole investor, the prominent venture capitalist firm Sequoia Capital.
At the time of the acquisition, the company’s two founders, Sequoia Capital, and platform’s employees shared the mix of stock and cash that Meta paid.[14]
Since its acquisition, it is unclear how much WhatsApp is worth independently of Meta and its other platforms like Facebook and Instagram. However, as of July 2022, Meta had a market capitalization of nearly $500 billion.
Over the last four years, WhatsApp has greatly increased its estimated revenue. While Meta does not share the exact numbers, analysts have estimated the company increased its revenue from $1.3 billion in 2018 to $8.7 billion in 2021.[15]
| Year | Revenue |
|---|---|
| 2018 | $1. 3 billion |
| 2019 | $2.3 billion |
| 2020 | $5.5 billion |
| 2021 | $8.7 billion |
That represents impressive revenue growth. However, in order for investors to take advantage of WhatsApp upside potential, they would have to invest in Meta as a whole. There is no way to invest individually in WhatsApp.
Is WhatsApp Profitable?
WhatsApp is a part of Meta and generates a significant amount of profit for its parent company. With an estimated gross revenue of $8.7 billion in 2021, the platform is profitable. With its success in international markets, WhatsApp’s revenue is likely to continue to increase as more people use the platform for a messaging service.
However, WhatsApp is not as profitable as it might be. Apps like WeChat are able to generate more revenue per user via different monetization strategies. If WhatsApp were to pivot to another monetization strategy, there is a good chance that it would also be able to generate more revenue per user.
That could greatly increase its revenue and profitability.
Conclusion
That’s it! We have covered a lot of ground in this guide, from the history of WhatsApp to its business model.
WhatsApp is one of the most successful messaging apps in the world, and it’s clear that their strategy has been successful. They have managed to remain relevant in a crowded market by focusing on simplicity, reliability, and security.
WhatsApp is also continuously innovating and improving their product, which is why they were able to beat other messaging apps in the long run. Their success is proof that a great product can help a company grow even if they don’t rely on ads for monetization.
In the end, it all comes down to one thing: people. WhatsApp has grown because of its user-base, which is made up of real people who use the app to connect with their friends and family around the world. It is a simple, effective messaging app that makes life easier for both parties involved in a conversation.
As long as people continue to use WhatsApp and find value in it, they will make money—and so will Meta (Facebook).
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Sources
- Investopedia ↑
- Statista ↑
- Business of Apps ↑
- Yahoo!Life ↑
- The Guardian ↑
- Quartz ↑
- Business of Apps ↑
- Business of Apps ↑
- Business of Apps ↑
- WhatsApp ↑
- Business of Apps ↑
- WhatsApp ↑
- WhatsApp ↑
- Crunchbase ↑
- Business of Apps ↑
How to make money on Reddit legally?
Social networks
0 2.183 3 minutes to read
Reddit is a widely used platform with 330 million users. And since it provides so much more freedom than Facebook, Twitter, or many others, it's only natural that someone wonders if it can be used to make extra money.
In this article, we will show you how to make money legally on Reddit.
What is Reddit?
In this article, we are going to show you several ways to make money legally on Reddit, but before that, you need to fully understand what Reddit is, how it is used, and how to get the most out of it.
Reddit is a social network that is different from more traditional social networks such as Facebook, Twitter or Instagram. While the latter are based on articles and content, Reddit is based on discussions. While on Facebook comments are an addition to the content of an article, on Reddit comments are an important part of the article.
If you don't know much about Reddit, think of the site as a collection of online forums . Each forum has Créneau , or special interest. People who share this interest meet on this forum and share content for the purpose of discussing it.
It is very important to understand that Reddit is primarily a social network in English.
Unlike the other three we mentioned earlier, Reddit doesn't have a lot of Spanish-language forums. In fact, about 70% of Reddit users speak English; although many of them are not native speakers. Reddit is a lot too the most popular among youth than the old.
How to make money legally on Reddit
To make money on Reddit, the first thing you need to do is open an account. This is required for to join the forum, post and comment.
The next thing to do is to choose a strategy and niche . Un "Niche market" refers to " a specialized market segment for a specific product class or interest . In other words, it means knowing exactly what you are offering or what you want to do. It will depend on your skills and what you like to do.
For example, if you can draw, you can offer an individual design. If you are a good programmer, you can volunteer your services.
Even if you don't plan on joining a specific community and want to offer something more general, it's good to have an idea of what you want to make or sell.
Be aware that there are many other people who offer their services just like you; to be competitive with you have to be very good or join the community with very high traffic.
To choose your topic or niche, you can follow the same principles as you wish. create a blog on what you like. Use popular themes that attract people who are willing to pay.
Interesting Communities
There are communities for almost every niche you can think of, but most of them are not allowed to buy and sell services. However, some allow you to promote your own work. For example, if you are an artist, you will not be allowed to sell your paintings, but You can post photos of your paintings , which will allow you to express yourself.
We recommend that you first explore the communities that interest you and where you can make a name for yourself.
Once you do this, you can explore buyer and seller communities or worker communities.
If you have nothing to sell or show, don't worry, you still have hope. There are communities dedicated to different professions:
En p / PivoMani you will give tips on making money in line . You can't make money directly from this subreddit, but you will find plenty of external sites that you can profit from. This site has related subreddits like r/beermoneyglobal, r/signupsforpay and others that you can easily find by logging into the community.
In r / slavelabour, genus display the services they need, and people offering this service comment on the post and agree. If you choose to join this community, please read the rules first.
In conclusion, there are many ways to make money on Reddit , but you must have something to sell and know the market you are in.
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Billions in Advance: How Messengers Make Money
Why do messaging services cost billions and how can they make money?
The creator of the WhatsApp messenger, Jan Koum, is 38 years old, his fortune is almost $ 7 billion, the founder of Snapchat, Evan Spiegel, is only 24 years old, and he also managed to become a billionaire thanks to his project.
The boom in mobile messaging services has allowed young entrepreneurs to quickly break into the Forbes rankings. Their companies still generate almost no revenue, but are nonetheless valued by investors in the billions of dollars.
WhatsApp, Snapchat, Chinese WeChat, and other services belong to the second generation of instant messengers. Popular in the early 2000s, services like ICQ were mostly used on desktop computers. Much has changed since then: the massive spread of smartphones and the availability of mobile Internet have shifted the center of communication to portable devices. Few of the former leaders managed to rebuild - the audience of the same ICQ year by year is reduced by tens of percent.
The victims of the new wave of messengers are not only their outdated competitors, but also traditional forms of communication - the same SMS messages.
“The reason is simple: messengers are free to use, there are many different features, more advantages than previously popular means of communication,” Jun Masuda, executive director and director of strategy and marketing of the Japanese Line Corporation, which owns the messenger of the same name, tells Forbes.
There is another factor: many have abandoned individual accounts - they use a regular phone number instead. Now you do not need to look for an interlocutor on the service, it is enough to save his phone number in a notebook.
As a result, large corporations became interested in instant messengers. WhatsApp was bought by the social network Facebook for $19 billion. The same Facebook and Google were fighting for Snapchat. But Evan Spiegel has so far refused to sell the project. Yahoo is going to invest in Snapchat, the messenger's valuation has already grown from $3 billion to $10 billion. Players who understand the value of instant messengers consider it important to connect them with their services, which is most likely why this trend is emerging, ”Masuda believes.
Messenger audience is huge. Line is used by 460 million people, WhatsApp by 600 million people. How do messengers make money?
Emotions with a picture
Advertising is considered the main way to make money on the Internet.
Almost all popular messengers do not have it. "When ads are involved, the user becomes a product," said Jan Koum, who previously sold ads at Yahoo for several years. The creators of WhatsApp have chosen an easy way to monetize through a paid subscription: the first year of communication is free, and then $1 per year. The expectation is that in the first year the user will become attached to the messenger and will be forced to pay in order not to lose contact with friends.
Snapchat founder Evan Spiegel thinks differently: the first advertisements will soon appear in the messenger. It will not be targeted, Spiegel promised. However, this was quite difficult to implement, because the main feature of Snapchat is that it removes user content from its servers and cannot analyze it.
Another way to make money is selling stickers. These are pictures with which users can express emotions. They are becoming a kind of communication standard, not only in instant messengers, but also in social networks: recently stickers appeared on Facebook, a little earlier - on the VKontakte social network.
Line, for example, has a dedicated Creators Market service where users can create and sell their own stickers.
Legend has it that Jan Koum hung a note next to his desk from WhatsApp co-founder Brian Acton: “No ads! No games! No tricks!
Asian messengers are different. The strategy of Line, WeChat, and Kakao Talk is to build an ecosystem of additional services around the messenger — games, mobile commerce, music sales, and others. For example, LINE earned $336 million in 2013. Game sales accounted for about 60%, and stickers accounted for another 20%.
Masuda believes multifunctionality is the future of instant messengers. According to him, smartphones are now becoming a replacement for personal computers, and instant messengers are turning into analogues of Internet portals: they should play the role of intermediaries.
Secrecy
One statement by the South Korean authorities led to an increase in the popularity of the Telegram messenger Pavel Durov in the country.
The country's prosecutor's office offered to monitor the forums in order to stop the spread of rumors, and the Koreans immediately thought about the confidentiality of their negotiations. Telegram, as its creators say, provides such privacy.
A similar story happened with the FireChat messenger, which allows you to communicate without accessing the Internet. And at the same time, anonymity is maintained. The first wave of popularity of this messenger took place in March, when the number of downloads reached 100,000 per day.
This came as a surprise to Open Garden, as FireChat was more of a hobby for them.
The second wave of popularity came in October during demonstrations in Hong Kong - more than 100,000 downloads.
Messengers, whose main feature is the secrecy of correspondence, have become a mass phenomenon in just the last two or three years. In addition to Telegram and FireChat, there is also CryptoCat, which Edward Snowden used during his first communication with journalists after escaping from the United States, or the Swiss messenger Threema.
