How Does Whatsapp Make Money?

What is Whatsapp?

Whatsapp is a mobile messaging service owned by Facebook. The app allows for mobile communication in the form of text, audio or video to be done over the internet, allowing the user to avoid airtime or text messaging fees through their carrier. The company was founded in 2009 by Brian Acton and Jan Koum after they left Yahoo. People that have been paying phone bills from that time and on will remember, text messaging and calls could get pretty costly. This was a time when most mobile plans included a set number of talk minutes and texts that could be used each month. When these limits were surpassed, mobile phone bills became very expensive. The app has retained popularity with the addition of group chat, location sharing, and voice texting. The app surpassed 1 billion users back in July of 2017.

How does Whatsapp make money?

Whatsapp used to make money through a basic subscription model, the cost was $1, this was done in different ways in different countries. Some countries it was free, or free the first year then a dollar for years after. It really varied, up until Facebook took the reigns, then announced in 2016 that they would be changing things. They removed the cost to download and hinted at utilizing other ways for the app to make money. The way the announcement reads it appears as though they will have specifically targeted ads to customers likely in the form of text messages. They believe that this will be a more profitable way to monetize use rather than charging subscription fees.

Recent developments

Whatsapp just released Whatsapp business to allow users to know that they are talking to a certified business and to allow small business owners to better utilize the app. The app is very popular among small businesses in developing countries such as India and Brazil, as a matter of fact, it is reported that 80% of small businesses in these two countries rely on Whatsapp on a daily bases.

Fun facts

The app has not spent a single dime on marketing or user acquisition, it has all been done by word of mouth.

The founders of Whatsapp both applied for jobs after leaving Yahoo at Facebook and Twitter and were not chosen for positions. After this, they focused all of their time on the app and eventually Facebook liked their innovation so much that they purchased the company for $19 billion.

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