WhatsApp is a messenger service that is one of the world’s most-used social media apps, with over 1.5 billion users. This is a free messenger service that has made communication better than ever. WhatsApp started as a status update application; eventually, they launched WhatsApp 2.0, a messenger app with several features. Jan Koum and Brian Acton, founders of WhatsApp, wanted to create an ad-free affordable messaging platform. As we all know, currently using, WhatsApp does not need any paid subscription, and it is also an advertisement-free application. Now the question is how they have been making money from this widely used app; what their business strategy and revenue model are. Let us discuss these aspects. (Source & Reference)
Initial Annual Income Strategy
During the starting days of WhatsApp, they used to charge minimal subscription money of $1 annually to use the app. Following this strategy, they brought $700 million annually to the business. The WhatsApp running model did not need much expenditure, as it only required a few primary costs of verification code transactions to the user and server costs.
Later, in 2014, ‘Meta’ purchased WhatsApp for 19 billion. Meta felt that a business model which is subscription based would not survive for a long time; it would require a sturdy revenue model. In 2016 the WhatsApp annual subscription fee was waived.
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WhatsApp monetization model (‘Meta’ Version)
Meta had new revenue plans for WhatsApp. WhatsApp launched the Business application, which enables users to open their profile and start a verified business network. These companies can create their profile and link their business site or Facebook page. Business bodies can also set autoresponders and link their landline numbers in their WhatsApp business profile.
However, WhatsApp’s central money-making feature was WhatsApp for Business API.
WhatsApp API enables businesses to integrate WhatsApp Business with their primary system to reach customers and solve their queries.
Also, API helps businesses programmatically send appointment reminders or event tickets to their customers or shipping confirmations.
How WhatsApp is making money through this model. It charges business bodies for late replies. If the customer gets the response after 24hr, WhatsApp will set the business for that. Many large-scale business sectors, like Retail, Garments, Medical sector, Tourism, Airline, Cab service, Food sector, etc., have already collaborated with WhatsApp business. They have largely gained profit after the collaboration.
WhatsApp payment feature
WhatsApp has launched a money transaction feature, ‘Payment,’ for Indian users. This will further increase their revenue in the Indian market. During a conference, Mark Zuckerberg recently said they plan to launch the WhatsApp payments feature worldwide. This will open more opportunities for businesses relying on this platform to monetize on the network effect.
Future Strategies
WhatsApp has planning to mimic Snapchat’s revenue-earning strategies. According to the Economic Times, the company will allow WhatsApp Business users to access the status feature, where they can advertise their product through photos, videos, texts, and GIFs for 24hr.
Also Read: WhatsApp Pay Safety Tips: Know How to Protect Yourself from Scammers!
