WhatsApp is free. So, how does it make money?
WhatsApp has 1.5 billion of monthly active users (Jan-2018). Free to download. No in-app packages and offers to purchase. No ads. But what is their revenue model then?
The messaging and voice call app was bought by Facebook in 2014 for $19b and, at that time , the app was charging to the users who used its services. Let’s see what happened and what may be the future plans.
Until 2016, as you maybe remember, the app wasn’t free. In some country, $1 was the amount to pay if you wanted to download it, in others the first year was free of charge, but later on the users have to pay between $0.89 and $1 per year.
So, until 2016 when the app became free, WhatsApp raised approximately and average of $700m per year. Then, Facebook (owner of WhatsApp) has decided to release the app totally free and with no advertising.
But things are changing now.
On May 1st 2018, WhatsApp’s CEO and Co-Founder, Jan Koum, has announced he’s leaving the company. He’s also planning to step down from the board of directors of Facebook, according to people familiar with internal discussions.
For The Washington Post, Jan Koum concerned about how Facebook is planning to monetize with WhatsApp’s users data keeping the same marketing strategy of the freeware platform with no ads.
The independence and the protection of its’s users’ data were a promise that Jan Koum and the other WhatsApp co-founder, Brian Acton, has always guarantee since Facebook bought them in 2016.
Talking about Brian Acton, it’s better to remember that he left his positions at WhatsApp and Facebook last year. Reasons? The same why Jan Koum is leaving today: the possibilities that Facebook may start to allow users’ data to third-parties via Facebook platform.
Brian Acton has recently invested $50m in Signal, a messaging app totally focused in encryption and privacy. He was also an active sustainer of the #DeleteFacebook campaign recently after the Cambridge Analytica’s clash.
Facebook has not recently commented and released updates regarding the users’ data of the messaging app. But they have announced WhatsApp Business that should allow brands to send direct messages to the customers, similar to Line@.
Exactly because of WhatsApp Business imminent releasing plan, Facebook is lightening the WhatsApp encryption allowing the access to some users’ data to third-parties and Facebook itself.
In the meantime, it looks that in India there is a beta version of WhatsApp that would allow users to transfer and exchange money via chat and in collaboration with certified financial institutions.
MOST 2414 is a digital marketing agency and consulting firm.
