How does WhatsApp make money? – WhatsApp’s Business Model

WhatsApp is a cross-platform mobile chat application and it has been a dominant player in the chat app market. In this article, learn more about how WhatsApp makes money and its business model.

What is WhatsApp?

WhatsApp is a popular, free app that lets you send messages as well as make video and voice calls to people who may live in different countries. With over 2 billion active users, the app is especially useful for friends and family members who wish to stay in touch.

A big reason for WhatsApp’s success is its accessibility on every device, its cross-platform functionality, and its simple, straightforward features.

Few people in the United States know about WhatsApp, but this messaging service has become an essential part of daily life in many parts of the world. The Facebook-owned company’s growth is vast and impressive, and it’s quickly becoming one of the most popular messaging services in the world.

How does WhatsApp make money

WhatsApp is extremely popular and it’s easy to see why — it’s one of the first mobile messenger apps to offer internet-based messaging for free. The app primarily relies on Wi-Fi to send and receive messages and calls, but cellular data can be used if needed.

Type:Instant messaging, VoIP
Initial release:January 2009
Original author(s):Brian Acton, Jan Koum
Initial release:January 2009
Website:www.WhatsApp.com
Written in:Erlang

How does WhatsApp make money?

WhatsApp doesn’t make money from advertisements. The founders despised ads and created a platform without them. They have a great user experience and interface as a result. They wanted to create a messaging app for social media users and not for big companies to place ads. To make their app more profitable, they created the paid version of the app that charges an annual membership fee of $1.

In 2009, five friends from Yahoo! made a small investment in WhatsApp. The company received a total of 250 thousand dollars from this five ex-Yahoo! friends, who were granted co-founder status. In 2011, WhatsApp was given an impressive 60 million dollars in funding by Sequoia Capital. This was a total of $8 million in 2011 and $52 million in 2013.

This is how WhatsApp managed to keep running. It had only one source of income, which was its use of the application. The only expense involved in running WhatsApp is the sent verification code, but that’s not a big deal. So it waived off the $1 subscription fees.

The founders of this company wanted to position it as an instant messaging application synonymous with the brand. They did this by utilizing the network effect. This strategy proved to be fruitful. After two long years, Facebook wooed WhatsApp. The popular messaging platform was acquired by Facebook for $19 billion in 2014 and all employees were put on Facebook payrolls. This includes Koum, who is now a part of Facebook’s board.

How does WhatsApp make money

What is the Business Model of WhatsApp?

How does WhatsApp make money? It’s a question many are asking after Facebook acquired the company for $19 billion back in 2014. Since then, the app has accomplished a lot, which is one reason people are wondering how it does so.

The new Facebook plans for WhatsApp helped users build their profiles and become verified on the platform. The company launched the WhatsApp Business application, which allowed people to create a business profile and meet other potential customers.

How does WhatsApp make money

With verified businesses, people can create profiles right on WhatsApp and link their website or Facebook page. For example, they can set up automated messages which send out when they’re out of the office. They can also link their landline numbers with WhatsApp and integrate the WhatsApp for Business API into their product offerings.

Whatsapp Business API-

WhatsApp Business is currently free to download and use for any business. For the time being, WhatsApp makes money by charging for the WhatsApp Business API. The company launched its first revenue-earning product, WhatsApp Business API. Now you can monetize your business on WhatsApp with the API. 

WhatsApp API allows businesses to connect with customers through notifications and support their queries automatically. To stop annoying ads, the company wants to restrict how many messages businesses can send. They can only contact people who first contact them, but the company is hoping to have an API where they can automatically send messages to their customers. The company is already working with clients like Booking.com, Wish, and more.

Some have criticized WhatsApp for its new strategy when it comes to monetizing the service. It offers a really strategic way to generate revenue for this product.

WhatsApp offers businesses a fee-based service. If businesses want to be able to reply to messages from users, they can do so for free for up to 24 hours but will have to pay a fee for every message past 24 hours. The charges vary by country.

Even if the business chooses not to use a chatbot, it can still reply manually through a third-party application like Zendesk. Now, most of you must be thinking that businesses can always use their mobile phones to reply late to customer inquiries. However, this technique doesn’t suit businesses with millions of customers (airlines, travel agents, theatres, banks).

In order to use the API, you can’t use a number that is already associated with a WhatsApp account. You’ll need a fresh number to install the API.

Payments-

With its new payment option, WhatsApp is now an unstoppable force in India. It’s the preferred way to send money and will continue to play a major role in the country. This is fantastic news for WhatsApp and will only serve as a boost to the company. 

Mark Zuckerberg recently announced his plans to introduce WhatsApp payments to the world soon. It will open up a wide array of opportunities for businesses to rely on this platform by capitalizing on the network effect.

Partners-

The smart team at WhatsApp has forged profitable relationships with over 50 carriers. One is with Sequoia Capital, which is responsible for funding WhatsApp’s growth and its career expansion. 

WhatsApp has many partners. For example, they cooperate with mobile companies to grow their services and user base. They are also aligned with app shops, operating system developers, and banks.

Customers-

WhatsApp is not only the most popular chat app in the world, but it also has over one billion active monthly users. From teens to adults to seniors, its user base is broad. Its goal has always been to provide individuals and businesses with a way to communicate instantly.

This app is valuable to many people around the world, who use it to conduct personal conversations with friends, family members, and associates in different countries. Businesses are adopting the app too, using it to connect with consumers and hold promotions.

Value Proposition-

WhatsApp is a trustworthy, appealing brand that offers accessibility, affordability, and simplicity. What the company is most known for, however, is its multitude of features such as sending messages with audio and video to friends without logging in and out. 

There are many benefits to the in-store instant messaging platform, but the best part is that it’s free to use! All you need is a data pack and WhatsApp will be the one to get the customer to come to you. WhatsApp guarantees that each communication transmitted through its app has an encrypted lock and key, which builds trust among the customer.

What is the history of WhatsApp? 

In 2009, having seen the potential for app development, two former Yahoo employees- Brian Acton and Jan Koum- created WhatsApp. The messaging app was initially designed to focus on statuses.

After Apple’s push notification update, Igor Solomennikov and his team optimized the new service to let users push status updates to their friends. It was especially popular as an instant messaging service, but then WhatsApp 2.0 came along and incorporated the messaging function that would become the defining feature of the app.

At one point, WhatsApp was a struggling company with a valuation of under a million dollars. But that all changed in February 2013 when investors began to take notice of the messaging app’s potential. Investors from all over the world were looking to get involved, and by March 2013, WhatsApp was valued at $1.5 billion.

As Facebook Messenger became more popular, so did the threat it posed to Facebook’s own chat platform. In response, Facebook moved to acquire WhatsApp for $19 billion. Facebook’s largest acquisition to date, by tech standards, is WhatsApp.

In February 2014, Facebook Inc. made what is likely the most expensive acquisition of all time by purchasing WhatsApp for a whopping $19 billion.

The growth of WhatsApp after its acquisition by Facebook in 2014 was quick. At the F8 developer conference in San Jose, Facebook announced that it has 2 billion minutes of voice calls and video calls on WhatsApp every day. Additionally, over 65 billion messages are shared daily.

Here’s the gist: WhatsApp’s business model is so successful because it’s a familiar company to everyone. It has completely taken over SMS and MMS, and we will see more and more of it as time goes on thanks to Facebook’s control.

If you liked reading this article, make sure to check out our article on how does TikTok makes money!