Whatsapp, the app behind one of the most popular communication platforms, has been a free application till now. And its founders want to keep it that way forever. The app’s parent company Facebook has been accused of using sophisticated data tracking techniques to target users with ads, but WhatsApp has refused to follow suit.
So if the app isn’t making money from ads, how does it fund itself? The answer lies in its subscription model and Business Model.
Let’s find out how?
Revenue Strategy at the Beginning
Whatsapp was initially developed by two former Yahoo employees, Brian Acton and Jan Koum, who founded WhatsApp Inc. in 2009 and launched the service in 2010.
WhatsApp is a cross-platform mobile messaging app that allows users to exchange messages without paying for SMS. The app had more than 700 million monthly active users (MAUs) worldwide as of January 2016, making it one of the world’s most popular social networking apps.
Initially, the company used a subscription model to generate revenue. It charged $1 for downloading and using the app. WhatsApp had a large user base with an average of 700 million monthly active users, which allowed it to generate revenue from its users of $700 million a year.
In Feb 2014, Facebook acquired WhatsApp for $19 billion.
This acquisition was a massive bet by Facebook that WhatsApp would be able to continue its growth and eventually become a significant source of revenue for Facebook.
As one of the most popular messaging apps in the world, WhatsApp has over 2 billion users.
This makes this acquisition so interesting – it’s not just about WhatsApp’s number of users today. It’s also about how much potential WhatsApp has to continue growing and eventually become a significant source of revenue for Facebook down the line.
According to recent studies, as a part of Facebook, WhatsApp makes $27 to $29 billion in revenue.
Business Model Of WhatsApp
WhatsApp also allows businesses to communicate with customers through text messages sent to individual customers using an automated system that will enable them to message millions of people using bulk SMS services from telecom companies like AT&T or Verizon Wireless.
It also allows businesses to create their customer database by automatically capturing the phone numbers of users who engage with them on the platform. This database can then send marketing messages to those customers later.
WhatsApp, the social media giant, has also made its way into the business world. WhatsApp has partnered with Google to integrate Google Maps into the app’s instant messaging platform. This means you can send your friends and family maps, locations and directions through WhatsApp.
To Sum Up
So there you have it! WhatsApp has shown itself to be a handy tool for communication and one that’s free for users. While the company has come a long way since it was founded, we expect them to continue innovating and providing new features to keep users engaged.
Somehow, WhatsApp has found a way to make money on social media. It has done so by providing a free service that people want and need. In addition, The company has also found a way to make money off its large number of users through advertising, which has worked well because of the number of users.
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