How does WhatsApp make money?November 30, 2021 2021-12-02 23:45
How does WhatsApp make money?
The most widely used messengers in the World as we speak, Whatsapp’s journey from 2009 till date has been tremendous. With approximately two billion users across the globe, this App should be generating a lot of revenue every year. WhatsApp has seen a lot of significant upgrades and changes since its start.
The revenue WhatsApp makes mostly comes from WhatsApp Business accounts and ads redirecting users from Facebook. WhatsApp’s takeover by Facebook has made a difference in so many aspects.
Facebook, having enjoyed its dominance, was always going to thrive with the green App. It should be no surprise why WhatsApp generates a lot of money. But if you are still in doubt and thinking, how does WhatsApp make money? Do not worry; we have some answers for you in this article.
Table of Content
- How did WhatsApp start?
- How does WhatsApp generate revenue?
- How to open a WhatsApp Business Account
- WhatsApp Pay
- WhatsApp Ads
- Frequently Asked Questions and Answers
How did WhatsApp start?
Brian Acton and Jan Koum were the orchestrators of the World’s most famous messaging App today. The App was first launched as a platform for updating your status, which members of your network can see.
The WhatsApp 2.0 was the version that had the messenger feature. Brain and Jan were both colleagues at Yahoo for nine years before the birth of WhatsApp. The inspiration behind WhatsApp was to create a medium that is 100% free of Ads.
WhatsApp’s resistance to interested investors was because of the no-ads policy they had at that time. By 2011, the messenger App has already racked up about 300 000 users around the World. They also got a deal with Sequoia, who agreed to the no-ads policy.
Two years later, in 2013, WhatsApp’s had grown to 200 million users, and they still stood their ground on ads. Their revenue resulted from providing the App for free in its initial year, followed by $0.99 for continued access.
Facebook eventually purchased WhatsApp in 2014, and it was already having over 450 million active users. The valuation of WhatsApp at $19 billion was a massive shock to many. This price may have been because of Facebook’s ambition to dominate the messaging system and saw WhatsApp as competition.
Over the years, Facebook has made its mark on Brian and Jan’s work. The App became accessible to all members in 2016 for free. The creation of WhatsApp for Business in 2017 was also a significant leap by the new partners. They are also the prospect of displaying ads in the nearest feature.
It is still a shock how Brian and Jan, who got rejected at Facebook, get to initiate the most popular messaging platform in the World. However, they both left in 2017 and 2018, respectively.
How does WhatsApp generate revenue?
At the moment, WhatsApp directly makes money in two ways. WhatsApp for Business and WhatsApp pay are the direct source of income for the owners. However, the app still gets indirect revenue from ads redirecting users for its mother company, Facebook.
How much WhatsApp earns from these sources could increase in the future with a newly proposed idea for charges. The idea is to charge Business accounts for sales they make through the platform.
How does WhatsApp make money from Business WhatsApp?
WhatsApp makes money from this feature by charging registered Businesses for late replies to their customers. The Business feature of this App was meant to create good customer support by Business.
If you have a business account, you must ensure that customers’ messages are replied to within 24 hours. Otherwise, you will get a charge, and WhatsApp makes money from your payments. This method is to keep business on the messenger platform.
Registered businesses are charged for slow replies, and the price is dependent on the country of the account. In the early days of these services, companies like Netflix and Wish were already testing the feature.
Today, many businesses have WhatsApp business account’s features to create product catalogs and provide their services. It is not difficult to open one of these accounts.
You can open a business account with a new phone number. Alternatively, you can use your existing contact to open a WhatsApp business account.
Although the business account is free, there are possibilities of charges per sale with this type of account.
How to open a WhatsApp Business Account
A business account for WhatsApp has some unique attributes, making it suitable for business owners and companies. To open one of these accounts is straightforward. It only takes a few steps to complete. Below is a step-by-step guide on how to open a ‘WhatsApp for Business account.
- Firstly, go to the Google play store and download the App. The WhatsApp business app is different from the regular messenger.
- The next you should do is verify your phone number
- Complete the backup and restore procedure
- Finally, set up your business profile and your business name.
- To build your profile, click on ‘More options. Then tap on the ‘settings.’
The simple steps I have highlighted above can get you up and running with your WhatsApp business account. This type of account helps you show your business to your new and existing contacts. It is also one of WhatsApp’s ways of monetizing the platform.
This method is another way in which this messaging App makes money. WhatsApp pay, just like ‘Google Pay’ is a payment platform. It uses the Unified Payment Interface (UPI) to complete transactions. This feature was only accessible to only a few countries.
Although the platform is still not accessible to all users, it could be another big-money alternative for WhatsApp owners. The platform charges close to 4% for each transaction. However, it has been adopted by only 20 million users.
This platform could be a valuable tool for many users when it is finally accessible to everyone.
Brian Acton and Jan Koum were the masterminds of this App and had some reservations about displaying ads on WhatsApp. Both men leaving a few years ago has not changed in terms of ads on the WhatsApp platform.
The ‘WhatsApp ads’ are not ads running in the app. However, these ads come from external sources that redirect you to WhatsApp. People that click on these ads will visit WhatsApp from Facebook.
This method is one of the monetization techniques in which WhatsApp utilize by taking advantage of Facebook. Since the Ads are not in WhatsApp, this seems like an indirect means of generating revenue.
These three methods are the methods WhatsApp makes money today. As the App has grown over the years, monetization has been relatively slow. However, they seem to be a few possibilities of monetization with WhatsApp.
The possible placement of Ads to users’ status can be a reasonable means of how WhatsApp can earn money. The payment platform could also be another promising feature that would thrive the monetization of the App.
After a big-money purchase in 2014, WhatsApp owners will be looking to leverage their massive number of users.
What is WhatsApp Worth?
WhatsApp was becoming one of the most popular messaging service providers in 2014. Their rapid uprise prompted the purchase by Facebook for a shocking $19 billion. The App has since created a few methods to monetize without the use of Ads.
The number of users has become very large since 2014, and a few upgrades have also occurred. Although WhatsApp does not openly reveal its revenue, the estimates of WhatsApp revenue have seen consistently increased. The App has also seen a 400% increase in members since Facebook came into the fray in 2014.
Looking at the price of purchase, you will be wondering, how does WhatsApp make money? Can they recoup the $19 billion they spent?
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WhatsApp’s recent activities and changes have mostly gone in the direction of monetization in different ways. WhatsApp for Business, WhatsApp pay, and WhatsApp Ads on Facebook are recent developments after Facebook’s takeover. It will not be a surprise if WhatsApp’s worth reaches the $19 billion spent seven years ago.
A good advantage is that they now have 2 billion people using this messenger App. This fact means that when monetization is brought to the forefront, they can generate more money.
How much does WhatsApp make?
WhatsApp’s annual revenue has increased a lot over the last few years. A compilation of the estimation of WhatsApp revenue reveals that there is always an increase in income annually. This trend dates back to 2014 when Facebook became a part of the messaging App.
In 2014, WhatsApp generated $1 million, following Facebook’s partnership, which was the beginning of the usurp. Two years later, in 2016, it was already developing an estimated $200 million.
The following two to three years was when WhatsApp had a record number of downloads. 2018 saw the App at a whopping $1.3 billion in revenue. As of 2020, the numbers were over $5.5 billion.
Today WhatsApp generates over $5 billion in revenue and could make more with potential monetization strategies.
WhatsApp’s current ways of making money have been mentioned in this article. However, check out our ‘Frequently Asked Questions and Answer’ section below if you have any more questions.
Frequently Asked Questions and Answers
Is WhatsApp free?
WhatsApp is completely free. Although it had a small monthly subscription during the first few years, in 2016, the app became accessible for all users at no cost.
How safe is WhatsApp?
WhatsApp offers end-to-end encryption for all your messages. However, its mother company Facebook can use data like your contact list to give you specific friend suggestions and ads. You will likely see posts from companies on your contact list. These activities are because of data shared within Facebook and WhatsApp.
How many countries have access to WhatsApp?
The messaging app is available in 180 countries and around the World. WhatsApp also allows over 60 languages.
How many users does WhatsApp have?
Whatsapp currently has over 2 billion users across the globe. India is the country with the highest number of users at 390 million users. Brazil, the USA, and Indonesia are also among the top 4 countries with many WhatsApp users.
How many Internet users have WhatsApp?
About 70% of internet users have WhatsApp accounts (with the exclusion of China)
How much is WhatsApp worth?
Facebook purchased WhatsApp for the sum of $19 billion in 2014.
How many messages are sent on WhatsApp every day?
They are more than 100 billion messages sent on WhatsApp every day. On the other hand, approximately 2 billion minutes are spent on calls and videos on the platform.
WhatsApp has been evolving since its integration with Facebook. The platform has recorded an increase in different aspects. The number of users, revenue generated, total downloads, and messages saw more activities.
However, monetization of the messaging platform has got a few limitations. The absence of ads could be one of them. WhatsApp has made a lot of revenue, but it has not recouped the $19 billion they spent. But they are suggestions from people that the purchase was not to get a return on investment but to overcome competition from WhatsApp.
As of 2020, WhatsApp made approximately over $5 billion in revenue. This figure is only a quarter of the purchase. The numbers are encouraging as the monetization of this messaging App is getting robust by the day.
So if you once thought, how does WhatsApp make money? I believe you now know the primary sources of income of this messaging App.