How can WhatsApp generate revenue for Facebook?
Facebook-owned messaging app WhatsApp has one of the world's largest user-bases with over 1.3 billion users. Despite being popular, it's been generating paltry revenue compared to its massive user-base. Even WhatsApp's rivals, WeChat and Line, monetized their user-bases through ads, games, and in-app purchases. Given its monetization potential, WhatsApp can create significant revenue for Facebook. Take a look at how Facebook can monetize WhatsApp!
WhatsApp is a free instant messaging app; the company was founded by Brian Acton and Jan Koum in California's Mountain View in 2009. Over 1.3 billion users across over 180 countries use the app to stay connected to family and friends. Social media giant Facebook acquired WhatsApp in a $19 billion deal in 2014; it currently has over 200 employees.
Over the years, the Facebook-owned WhatsApp has become one of the most-used chat apps in the world. The number of WhatsApp users increased at an impressive pace. Its user-base is expected to rise as global smartphone penetration increases. Also, its engagement levels are high with over 55-billion messages being sent per day on the app, apart from 4.5-billion photos and one billion videos.
WhatsApp's "impressive engagement metrics" would help its monetization efforts but it looks like Facebook is still not in a hurry to monetize the messaging platform. The social media giant is currently prioritizing WhatsApp's user growth. Facebook can generate "meaningful revenue" from the app through a strategy that is similar to WeChat's "online-to-offline e-commerce, added-value services, and games" monetization model.
Facebook can use a number of ways to turn WhatsApp into a "cash machine" but introducing payments service on the platform would help greatly. WhatsApp is reportedly working on an in-app digital payments service, which would be first introduced in India -its largest market- as a UPI payments option. Extending this feature to other countries would be a great way to monetize users.
WhatsApp's other potential revenue sources include in-app purchases like stickers and games within the app, which are also used by its rivals WeChat and Line apps. Additionally, the messaging app could also make money through in-app advertising. Integrating ads into WhatsApp's Snapchat clone "Status" feature would be a monetization driver given that WhatsApp Status itself has 300-million daily users.
WhatsApp isn't very open about its monetization plans, but it claims that it doesn't like ads. So, it is less likely that ads will be included in its plans. Meanwhile, it is reportedly building a new business app for allowing communication between businesses and consumers. As mentioned earlier, WhatsApp is also working on a UPI-based payments feature, expected to be launched by 2017-end.