WhatsApp is a messaging and communication app that uses a phone’s cellular or Wi-Fi connection to make video and voice call around the world. This is a multiplatform messaging app owned by Facebook, Inc. WhatsApp has more than 2 billion users and this app is completely free to use. Moreover, it has also surpassed Facebook’s messenger and Instagram and become the 2nd biggest property after Facebook. WhatsApp doesn’t earn revenue through advertisements so the big question is how does WhatsApp make money?
Initially, WhatsApp charged $1 for a year subscription however, since 2016 WhatsApp started to offer all its services completely free. Now, the majority of WhatsApp’s revenue is generated through Database Management. Other income sources of WhatsApp are WhatsApp for business API, WhatsApp payment service, etc.
WhatsApp Features
Here are the main features of WhatsApp:
1. WhatsApp offers a free, simple, and reliable messaging and communication service
2. Allows users to create groups so that they can keep in touch with people who matter the most
3. It is available on the Web and desktop so you can seamlessly sync all of your chats to your computer
4. WhatsApp offers free video calls and voice calls all over the world
5. WhatsApp has an end-to-end encryption feature that provides the highest level of security by default
6. You can send photos and videos instantly on WhatsApp and share the moment that matters
7. WhatsApp allows you to record a voice message and then send it to your friend and family
8. It allows the users to share PDFs, documents, spreadsheets, slideshows, and more and supports file sizes of up to 100 MB
Important Statistics About WhatsApp
WhatsApp is a very popular app with more than two billion users worldwide and India alone has 390 million WhatsApp users. WhatsApp is downloaded over five billion times on Android and iOS. Moreover, WhatsApp has made between $5 and $10 billion in profit for Facebook in 2020.
Overview Of WhatsApp
| Launch date | 24 February 2009 |
| Headquarter | Menlo Park, California |
| People | Will Cathcart (head of WhatsApp), Brian Acton (co-founder), Jan Koum (co-founder) |
| Industry | Communication |
| Business type | Subsidiary |
| Owner |
Revenue Of WhatsApp
| Year | Total Revenue |
| 2014 | $1 million |
| 2016 | $0.2 billion |
| 2018 | $1.3 billion |
| 2020 | $5.5 billion |
Users Of WhatsApp
| Year | Total Users |
| 2013 | 0.2 billion |
| 2014 | 0.5 billion |
| 2015 | 0.8 billion |
| 2016 | 1 billion |
| 2017 | 1.3 billion |
| 2018 | 1.5 billion |
| 2019 | 1.8 billion |
| 2020 | 2 billion |
WhatsApp Total Downloads
| Year | Total Downloads |
| 2013 | 0.5 billion |
| 2014 | 0.8 billion |
| 2015 | 1.2 billion |
| 2016 | 2 billion |
| 2017 | 2.9 billion |
| 2018 | 3.4 billion |
| 2019 | 4.3 billion |
| 2020 | 4.9 billion |
How WhatsApp Makes Money
Facebook bought WhatsApp in 2014 for $19 billion and it creates a huge reaction in the tech world. Mostly because the amount Facebook paid was large and many experts wonder how Facebook will generate revenue from WhatsApp because it’s a free app and all the services are also free. When Facebook bought WhatsApp, users had to pay 99p every year to use the app. Then, in 2016 Facebook made WhatsApp completely free to use and they also stated that they are looking for new features that would allow them to make money from WhatsApp. Some of these features are:
1. WhatsApp for Business API
2. WhatsApp Payment Service
3. Database Management
WhatsApp For Business API
This is an excellent revenue-earning product of WhatsApp because it makes WhatsApp more proficient. In 2018, WhatsApp launched WhatsApp Business, especially for businesses. With this business app, users can create a business profile, add links to their websites, and integrate the WhatsApp for Business API. Moreover, they will have a verified profile on WhatsApp. So the new WhatsApp business will help the businesses to reach out to a new customer base. The WhatsApp Business app is free to use but the API integration of the app is a large revenue source. The API will help the businesses because with it business owners can send shipping confirmations or provide event tickets. The customers can send direct messages to various businesses through WhatsApp business. If the business responds to messages from customers after 24 hours then they have to pay for every message they sent.
According to WhatsApp:
“We will test tools that allow you to use WhatsApp to communicate with businesses and organizations that you want to hear from. The goal is to have people communicate directly with their banks, airlines, etc. over the app, while the businesses pick up the bill previously paid through subscriptions.”
WhatsApp Payment Service
WhatsApp introduced its payments service named WhatsApp Pay. The introduction of WhatsApp Pay has increased the market position of WhatsApp and it also steals a good chunk of Snapchat’s customer base. Moreover, WhatsApp is trying to follow the revenue model of Snapchat and they are planning to introduce features that utilize videos, texts, and photos to promote their company.
Database Management
This is another big source of income for WhatsApp because when users use WhatsApp for communication, WhatsApp backs up all the information on their servers. Usually, the conversations reflect the likes, dislikes and majorly depict the preferences of people. This type of information has great value to big firms because they can analyze the data of a user and offer products that they might be looking for. So the amount of data WhatsApp has on their server, many big companies will be willing to pay handsome amounts of money for information extraction.
FAQs About WhatsApp
1. How Much Is WhatsApp Worth In 2020?
2. What Countries Use WhatsApp The Most?
3. What Countries Use WhatsApp The Most?
1. India: 390 million
2. Brazil: 108 million
3. United States: 75 million
4. Indonesia: 68 million
5. Russia: 64 million
6. Mexico: 62 million
7. Germany: 48 million
8. Italy: 35 million
9. Spain: 33 million
10. United Kingdom: 30 million
4. How Does A Free App Make Money?
1. In-app purchases
2. Affiliate Income
3. Subscription
4. Freemium content
5. Advertisement
6. Selling the API
5. What Is The Difference Between WhatsApp And Business WhatsApp?
6. How Much Does WhatsApp Business Cost?
7. Is WhatsApp Business Any Good For A Business?
8. Can I Use WhatsApp Business And WhatsApp On The Same Phone?
9. Can WhatsApp Business Be Used For Personal Use?
References:
1. https://www.investopedia.com/articles/personal-finance/040915/how-whatsapp-makes-money.asp
2. https://www.feedough.com/how-does-whatsapp-make-money/