WhatsApp! Where would you be without it these days? It is the most popular messenger app with more than 2 million monthly active users. Almost 25% of people in this world use WhatsApp. But, have you ever wondered how this globally popular APP makes money?
WhatsApp was founded by two former employees of Yahoo: Brian Acton and Jan Koum. The basic objective of creating this masterpiece was to keep people updated about your life and your current location with the help of WhatsApp status. After getting lots of attention, they hit the creators’ minds and they decided to make it a global messenger. The decision hit the bull’s eye and WhatsApp became the first app on which one could communicate with others for FREE.
And we all love the free stuff, right? WhatsApp’s popularity skyrocketed in a very short time. Within 2 years, the app made its way to the top 10 in the Appstore, without any marketing. Talking about money, WhatsApp didn’t have to spend lots of money on marketing, advertising, and selling its product, unlike every other app. Observing the immense growth of WhatsApp, companies didn’t miss the chance to invest in the app. The company itself started to charge 1 dollar per year from the customers. Yes! Only 1 dollar. While keeping the charm of its app, WhatsApp kept adding new features like sending photos, videos, etc. And like magic, they kept growing.
The 1 dollar business was a big success which made WhatsApp a profitable company within just 3 years. They started to invest in their team. As Jan Koum said, “Our passion is our product, your data isn’t even in the picture”. The irony here is, the companies that rejected the founders of WhatsApp, started taking interest in the app. Mark Zuckerberg, the founder of Facebook, had been trying to buy WhatsApp since 2012. Mark succeeded to seal the deal in 2014 and Facebook bought the app for 19 billion dollars. Huge value, right?
But why would a billion-dollar company want to buy WhatsApp? And the answer is very simple if you can’t beat the competitors, shake hands with them. WhatsApp was the biggest competition for Facebook messenger. To win the race, they made the deal with WhatsApp. Another big reason Facebook bought WhatsApp was getting the DATA. They realized that they could use this user data to earn money. It is said that since that time, there have been many constant clashes and conflicts between both companies. To earn more money, Mark kept pressurizing both founders of WhatsApp to introduce business partnerships and models in WhatsApp.
At last, under immense pressure, both the founders of WhatsApp gave up in 2017 and announced to leave the company, saying that the concept of data privacy of Facebook, and the forced business model isn’t tolerable at any cost. Tragic, isn’t it? In 2018, Facebook launched the WhatsApp business app in which a user can create business profiles and link them directly with their Facebook pages.
Although the app is completely free to use, the business API (Application Programming Interface) is the source of revenue for WhatsApp. API is the medium through which multiple applications can communicate with each other. Facebook didn’t stop there. In November 2020 WhatsApp pay was launched in India. This means for every payment; a royalty would be paid to WhatsApp. In total, 2.6 million transactions have been made to-date with a total worth of 13 million dollars. Nowadays, Facebook is looking for more ways to generate more revenue by introducing Ads in the stories. Let’s just grab popcorn and see how many ways Facebook can find to generate more money.
