The first thing we do when we wake up in the morning is to check our WhatsApp notifications.
Even though a lot of us deny it, it’s the truth.
Even though it is riddled with irritating ‘Good Morning’ messages and widespread fake news, it has become such an integrated part of our everyday life that we just can’t go about our day without clicking on that little green icon!
WhatsApp is the biggest messaging app out there with over 2 BILLION active monthly users!
Now, this is all good and fun on paper but WhatsApp is free to download the app and doesn’t require a recurring subscription model. Let’s face it, no one is in the business for doing charity, everyone wants to make their businesses money minting machines. So how is WhatsApp doing that?
So let’s dive right in!
Before launching WhatsApp in 2009, both Jan Kaoum & Brian Acton, worked together in Yahoo for 9 years, from 1998 to 2007. In the period between leaving Yahoo and starting WhatsApp, both of them even applied for jobs in Facebook and Twitter but got rejected. Brian Acton even tweeted about the rejections saying-
Initially, WhatsApp was never meant to be a messaging app, it was just an app where you could periodically put up a status mentioning what you were up to so that everyone in your life was caught up. But soon, they realized that their users had started using the app as a messaging service by periodically changing their statuses and the rest is history!
Back in 2009, there was only one other app on which offered free messaging-BBM. But the catch here was that only people who had a blackberry phone could avail this unbelievable deal. Thus, WhatsApp filled in the gap. The users of other phones felt the need for a free messaging app, and WhatsApp became that app.
Within days, it was downloaded over 200,000 times.
WhatsApp started receiving funding from investors. Its popularity skyrocketed on its own.
Without any marketing or ads! The growth was totally organic!
Around 2009, all the telecom service providers used to charge exorbitant prices for a mere phone call or text message.
And here was a clearcut free option so people started using WhatsApp.
Within the next 2 years, this app became one of the top 10 apps in the AppStore.
This was true for almost every country except for America. This was majorly due to the fact that all the service providers had flat rates for SMS and calls
So there wasn’t a big incentive to shift to a different platform.
Financially speaking, initially, the company didn’t burn much. They had a small team, they had built a simple app. The biggest hurdle for them was the cost of sending the verification texts.
So they came up with a subscription-based business model, where they started charging $0.99 annually!
This was a huge success! By 2011, their app had become the top app in the AppStore.
From the beginning, Acton was clear about one thing- they would never run ads nor would they play with their user’s privacy!
Ironically, soon after this, the co-founders decided to sell their company to Facebook.
WhatsApp was taken over for $19 billion by Facebook. And the employees working in WhatsApp now became Facebook employees.
The chain of thought in Mark Zuckerberg’s mind was with WhatsApp and Facebook messenger, both in their arsenal, they would dominate the social media world.
After this deal, Acton and Koum, the founders of WhatsApp became billionaires overnight.
But there were constant conflicts between Facebook and WhatsApp over the next years.
In January 2016, we get to know that WhatsApp had removed its $1 fees.
And WhatsApp became a completely free application again.
The reason behind it is said to be that there are many countries like India where people don't have credit cards. So they weren't able to pay the $1 fee, and many people were actually unable to afford it.
During this time, it was being said that WhatsApp would try to get into partnerships with businesses
and would try to find a source of revenue from there.
At the same time, Mark Zuckerberg was being pressured by his investors because $19 billion had been paid to buy out WhatsApp and there was no cash flow in the company. So in turn, Mark pressurized the founders of WhatsApp. Fed up with this, the founders of WhatsApp surrendered and left in March 2017.
Now, WhatsApp was completely in the hands of Facebook.
In 2018, Facebook launched the WhatsApp Business app. On this app, businesses could create their business profiles and the verified businesses can link their websites and Facebook pages, with this business profile.
Although the WhatsApp Business application is completely free to use, the Business API is the source of revenue for WhatsApp.
Facebook even launched a service known as WhatsApp Pay.
Although, for normal users, WhatsApp pay would be free to use, but for the businesses, they would have to pay a flat fee of 3.99% on every transaction.
Apart from this, Facebook is also considering running ads on WhatsApp. So that they can earn even more money.
It is being planned that the statuses in WhatsApp, would eventually host ads.
Recently there have been a number of controversies revolving around WhatsApp’s privacy policies.
Everyone is uncertain about the future, about how WhatsApp data would be used.
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