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How Does WhatsApp Make Money?

WhatsApp is an extremely popular messaging application widely used by people all across the globe. It started as a messaging application but now it has also entered the realm of transferring money. From audios to videos and texts, WhatsApp is an integral part of how we use cellphones today. 

Over a period of time, facebook has tried different ways to make money. Let’s take a deeper look at WhatsApp’s business model:

WhatsApp Business

WhatsApp Application is an independent application designed specifically for businesses. It offers features like automatic messages to its customers. The easy accessibility and convenience makes it a very popular app amongst people. 

The application is free for the first three months and then one needs to shell out $0.50 per month across all android and iOS devices.WhatsApp business is different from a regular WhatsApp application. It provides the user with data and analysis to comprehend how well the messages were responded to by the customers. 

WhatsApp business is a splendid tool for communication with the customers. It saves oodles of time and money, since the application is all about immediate response. The automated  messages are the highlight of this application. 

WhatsApp Pay – A New Entrant

Giving stiff competition to all kinds of e-money platforms and internet banking, WhatsApp has now become a major player in transferring money digitally from one WhatsApp profile to the other. It has started to gain popularity and has become immensely popular amongst users who have been transacting in money online. 

To transfer money through Whatsapp pay, one needs to have the latest version of the app downloaded and linked to their bank account. It wouldn’t be wrong to call WhatsApp a melting pot for all kinds of transactions. Text/ audio/ video or now even money. 

The service is available for banks which support the UPI (Universal Payments Interface). Therefore, the list of only those banks will be visible which support this interface. The steps for making the payment are similar to any of the other e-money transfer applications like Google pay etc.

Selling User Data

Once your data is out on these public platforms, it can never be private. Facebook acquired WhatsApp,  therefore whatever data you post on WhatsApp or the personal or business content is automatically shared to facebook. So the pop up which says ‘your messages are end to end encrypted’ is not entirely true’. 

According to recent data, WhatsApp is also forcing its users to share their personal information with facebook, including phone numbers and location with its parent company. In a nutshell, facebook already has a lot of data already collected and stored. 

Many contrasting theories also say that all the data that one shares on WhatsApp is end-to-end encrypted and no one has access to the data which is transmitted. The data though is only sold for advertisement purposes. 

How Much Money Does WhatsApp Make?

Hands down, WhatsApp is the largest communication platform and billions of messages are exchanged on a day to day basis. The application started as a ‘free’ service and eventually shifted from a business model and also stayed away from in-app advertising. Now they have started making money through WhatsApp for Business and WhatsApp Pay. 

By March 2022, WhatsApp had more than two billion users in 180 countries and was the second biggest property after its parent company. 

The revenue for the application in 2021 was $86.15 billion.  In a lot of countries, the subscription fee was $1/year for each WhatsApp user. Under this business model, it had 700M users worldwide, based on that, the yearly revenue can be estimated at around $700 million. 

WhatsApp never did reveal its financial statements, Forbes estimated its revenue to be $27-$29 billion by the first quarter of 2022. As of March 2022, WhatsApp had over two billion users. 

The top three consumer countries are India with 390 million users, 108 million in Brazil and 75 million in the United States. By using referrals and the momentum with which its popularity is increasing, the application has become widely popular amongst all kinds of age groups. 

Future Money Making Strategies 

Facebook became WhatsApp’s parent company in 2014 and that opened multiple vistas and avenues for WhatsApp. The WhatsApp Business Application has led to numerous possibilities for the company to even soar further and beyond. The verified business accounts have led to a wide range of advantages for small as well as big shot entrepreneurs. 

The quick responses as well as automatic answering and replying on these accounts is widely gaining recognition and more and more people are able to reach out to their clients more effectively. 

All the business accounts will be able to respond to their consumers for free within the first 24 hours but will have to pay a fee for every message sent after those 24 hours. The cost is different for each and every country, in fact it varies from region to region. 

Interesting WhatsApp Statistics

  • WhatsApp has a user base of circa 2 billion around the globe. While 2018 had 1.5 billion users around the world, which rose from 1 billion in 2016. The number just keeps rising. It has slowly been spiraling upwards to dethrone facebook, the king of social media. 
  • Its popularity ranks ahead of its counterparts and alternatives such as WeChat and QQ Mobile. Followed by Telegram and Snapchat. 
  • In April 2021, WhatsApp Messenger had been downloaded around a whopping 13 million times. In the first quarter of 2021, France saw the largest downloads, but in the adjacent Germany, it only increased by 10.2 percent. 
  • WhatsApp is available in 180 countries and in 60 different languages. European countries such as the Netherlands and Spain have witnessed a surge in its popularity. There are also countries such as Cuba, Syria, Iran, the UAE, North Korea and Qatar where the app is completely or partially blocked.
  • India is currently the biggest consumer of WhatsApp with 340 million users. The second largest consumer is Brazil which is home to 99 million users. Despite being born in California WhatsApp surprisingly is not as popular in the US.

WhatsApp Funding and Valuations  

WhatsApp has raised a total of 16.3 million dollars in funding which happened over the course of 3 rounds full stop the latest one being on July 1 2013 and it was funded by Sequoia capital. 

The funding which happened over a course of three rounds with one lead investor raised a whopping 60.3 million dollars. 

A Sneak Peak Into The History of WhatsApp

WhatsApp is a widely used and one of the most popular messaging applications used globally with a large scale consumer market. It was founded in 2009 by two former employees of yahoo, Brian Actun and Jan Koum. 

The Masterminds Behind The Discovery of WhatsApp

Before WhatsApp was around, people were charged a fortune for sending a text or a message in any form. This prompted the founders Brian Actun and Jan Koum to come up with this business idea of creating a messenger application which would allow people to send messages and other documents freely and without any interruption. 

Pretty soon, it became an important part of social media and social networking and changed the entire face of how we send and share messages and media. 

Jan Koum, born in Ukraine, soon shifted his base to the US and now resides in Atherton, California. Jan Koum was ranked 62 out of 400 richest Americans with a net worth of approximately $7.5 billion in 2014.

Brian Acton was born in February 1972 in Michigan, US. He studied at Stanford University where he graduated with a degree in Computer Science.

These two geniuses came together to create a messenger application which tasted success like no other. 

Facebook Acquisition – An Important Event in Tech History

In 2014, Facebook bought WhatsApp for a staggering value of 19.3 billion dollars. Even though both the applications function and perform separately, WhatsApp has always focussed on messaging services and Facebook is a social networking application. 

Interestingly Brian Acton, once upon a time wanted to desperately work with Facebook and Twitter but his application was rejected, but he went on to sell WhatsApp for a fortune. Both Acton and Koum went on to grab a spot in the Forbes’ list. 

Apparently, the rumor mills were abuzz that Facebook saw WhatsApp as a threat and decided to hold hands with it in order to become indispensable. Facebook’s move to acquire WhatsApp remains the largest acquisition in tech history. 

WhatsApp had reached 450 million active users after merging with Facebook, the application had reached this number faster than any other company in history. 

Facebook aspires to become a super power, with complete monopoly over all the other applications and a parent company to mega applications like WhatsApp and Instagram. 

Promises Made by Facebook After Acquiring WhatsApp

In 2014, when WhatsApp rolled over to Facebook, Zuckerberg had promised WhatsApp founders that they will be under no monetization pressure for the next five years. Albeit, the pressure to commercialize came sooner than expected. 

WhatsApp had always been an ‘anti advertisement platform’, while Facebook wanted to include ads. Brain soon coined a ‘metered -user model in which users would be paid only after a certain number of messages were exchanged. 

Nonetheless, the convergent goal was to increase global connectivity and shrink the world to bring people closer. Eventually Zuckerberg merged the three giants of Facebook, Instagram and WhatsApp together, the holy trinity, which every active internet user would use. 

The company eventually came to be known as ‘Meta’. Both Facebook and WhatsApp worked hand in glove and helped each other reach countries where either of them lacked. 

The users on WhatsApp have been highly active and a humongous amount of data is shared on this very platform everyday. At that specific point in time, Facebook had started to lose its spark and WhatsApp Inc had a promising vista ahead.

Naturally, when two giants like these come together, fireworks are bound to happen. The strong international presence that WhatsApp, a highly popular messaging app, boasts of, in countries like India, South America and Europe, definitely has accelerated Facebook’s growth and has resulted in a win-win situation for both the parties. 

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