Whatsapp Business Model How Whatsapp makes money

Messaging apps are connecting people effectively and efficiently. Then it is the modern way of communicating with the people. As it became a new norm.

So, as of now, there are thousands of messaging platforms. But only a few apps are having million of userbases. Now connecting with people is so easy and quick.

With a few clicks, one can easily become a friend and chat with each other. So, engagement with the people is no more a difficult task.

If we are talking about the chatting application then Whatsapp is a no better app in the world. Because over 2 Billion people are using the whatsapp app for chatting and 390 monthly active users.

It is having an enormous amount of userbase in the world. More than userbase it has become part of people’s lifestyle. For the years, Whatapp has built mental and emotional connections with the people.

So, it is difficult to beat the competition against Whatsapp. Therefore, Whatsapp is impacting people in a positive direction. Here, Whatsapp is the monopoly in the chatting application category.

Now, so many people are assuming that Whatsapp is earning billions of rupees per year. The majority of the people don’t about the revenue model of the Whatsapp app.

Here in the blog, one can easily understand the Whatsapp Business model and way of earning.

Whatsapp Business Model

Now, in 2022 Whatsapp is a part of Facebook. But Whatsapp was not under Mark Zukerberg’s hand till 2014.

Whatsapp was founded by Jan Koum and Brian Acton in 2009. It is one best story how Whatsapp started.

Founder Jan Koum was busy with the Gym and could not able to receive the calls. So, it was a big problem for him to get information from his friends and family.

Then he use to think about an application so that can solve his problem. The main problem statement is to inform yourself of your loved ones. 

So, Jan Koum was thinking about information about his activities to the closed ones. Then he can make sure that no will disturb time while in the gym.

In 2009 Jan Koum and Brian Acton founded Whatsapp. Initially, Whatsapp was not a chatting application. Instead one can only type about the present activity one is doing. Then others can view his status at a particular time.

After the launch of Whatsapp people were happy about using the services of the application. Then people started using it as a chatting application with limited features.

There were two reasons for the demand for chatting applications.

1. At that time there were no other chatting applications other than iPhone messaging platforms.
2. Then SMS are too costly 
3. Due to the lack of internet connectivity and high prices, people are avoiding chatting applications.

It is the right time that Jan Koum and Brian Acton to launch Whatsapp. Then both realized the demand for the chatting services. Then after some years, even the chatting application was also introduced.

Now the app was completely free for chatting services. Even founders of whatsapp were not ready to put ads in the app to earn some money. 

How does Whatsapp make money?

But to maintain the cost and to get a return for the investors it became necessary to add the revenue stream from the app. So, the intention was clear not to publish an advertisement.

Then the app will be shabby and the value of service will become trivial. So, the founder came up with the subscription model to charge $0.99 per year.

But still, Whatsapp users happily paid and use the application. Then Whatsapp became the prime competitor with Facebook Messenger. 

Then Mark Zuckerberg made up his mind to acquire Whatapp. So, with continuous meetings and funding the company in 2014 Facebook acquired Whatsapp for $19 billion.

So, it was one of the costliest acquisitions so far from the tech industry. Mark Zuckerberg was a visionary and futuristic person.

It was clear that Whatsapp will be under Facebook but not collaborating with Facebook. Still, Whatsapp will work independently.

WhatsApp founders Jan Koum and Brian Acton were the primary focus is to secure users data. Then Facebook starts pressuring whatsapp to deal with the user’s data.

Mark Zuckerberg did not allow Whatsapp to work independently. Then in 2016 both founders Jan Koum and Brian Acton resign to the post due to unfair practices and an unsupportive environment.

Here Mark Zuckerberg went on to use the user’s data to make money. Now user’s data had become a gold mine for Facebook. Here is an example to understand whatsapp users’ data theft.

Facebook ADs strategy: Whatsapp Business Model

Imagine that you want to buy a mobile phone and then you will ask your friend for a suggestion through whatsapp. Here WhatsApp will start its magic. 

Herewith the help of technology like Artificial Intelligence and machine learning captures the data of the users. In this scenario, you are about to buy a phone. However, this piece of data is now with Whatsapp-owned Facebook.

Then this data will be given to Facebook to show the relevant ads in the app. So, here the probability of buying a phone through the ads is more. Then it will be beneficial to the Facebook company to generate more income through ads stream.

Even there is speculation that Facebook will share the data with the other companies to make money. Here the other company wants to sell the products to the relevant customers. So, here Facebook has millions of data of the people.

Ultimately here the companies and facebook are benefitting from the data.

This is one of the ways that whatsapp earns with use users’ data. But Mark Zuckerberg is claiming that there are such practices made in the Facebook advertisement strategy.

Even claiming that Whatsapp users’ data are completely safe and secure.

Whatsapp Business

Another source of income for the Whatsapp Business. There are so many businesses that want to showcase their products online. So, with the Whatsapp business account, one can easily showcase their products online and increase sales.

Therefore, for the business account, Whatsapp is charging certain fees. This is one of the Whatsapp Business model. Then Whatsapp API integration makes any business chat automatic and replies to the users instantly. So, the customer engagement will be strong and perfect.

Companies like Booking.com, Netflix, Uber, and Makemytrip are using Whatsapp API. This is how Whatsapp makes money.

In this way, the Whatsapp business model works and is early money. There were so many instances where Whatsapp privacy policy violations have come into the spotlight. But still, users are worrying about the issues and still using the whatsapp app.