Have you ever asked yourself, How does Whatsapp make money? Clickfunnels within a statistics and powerful argument: Well, while WhatsApp Messenger is free to download and use, there is a hidden cost of ownership. Anybody can create an account and send messages without paying anything. However, if you want to use this app for marketing purposes then there are some hidden costs involved. WhatsApp indeed charges nothing but the app is designed for sending text messages. At one point it would be good to ask how does Whatsapp makes money?
I guess most of us have been dreaming about making money with Smartphone Apps. And for those who were wondering how much does WhatsApp makes per user, read on.
Whatsapp recently turned its messaging platform into a commercial enterprise. This move led to over $1B in sales within one year. With this milestone, Whatsapp is now a unicorn with a billion-dollar valuation and has instantly become a global player in marketing. What drove the company’s success? How did it gain such a large customer base in such little time? And will this success last beyond the hype?
1. WhatsApp is a product of Facebook.
WhatsApp is a product of Facebook. The app was acquired by the social networking giant in 2014 for $19 billion. Almost all of the revenue that WhatsApp generates comes from the messaging app’s parent company – Facebook. In fact, for the majority of its existence, WhatsApp never even had a revenue model and it wasn’t until 2016 that it started making money.
WhatsApp has been working on allowing businesses to connect with their customers through the messaging platform. However, it is only now looking to monetize this feature.
The messaging service has over 1.5 billion users worldwide and about 200 million users in India alone. That makes it one of the most popular messaging apps in the world, along with WeChat and Facebook Messenger.
The platform allows you to send text messages or make voice and video calls securely to your friends and family. You can also share files like images or videos on the app but there are limitations to file size depending on your operating system (Android vs iOS).
2. How Does WhatsApp Make Money?
WhatsApp was a free messaging service, but to maintain it, the company had to spend money. It is because of this reason that Mr. Jan Koum made WhatsApp a paid platform.
So now you must be wondering, if WhatsApp is a paid platform, then how does Whatsapp make money?
Well, the answer is that WhatsApp charges its users an annual fee of $1 after the first year of use. You may ask why a single dollar per year? Well, it is because Mr. Jan Koum wants the app to be affordable for everyone and thus he has kept the annual subscription fee at $1 per year. Also, there are no hidden charges and no advertisements on WhatsApp that can annoy you while chatting.
3. Business Model of WhatsApp
The business model of WhatsApp is quite simple. You just need to extend the free trial. The app was free for the first year, after which users had to pay $0.99 per year. By having a yearly subscription user base, WhatsApp would have been able to generate revenue from day one
4. How Many Users Does Whatsapp Have?
How Does WhatsApp Make Money
WhatsApp has more than 1.5 billion monthly active users. This makes it the most popular messaging app in the world.
The service is available in more than 180 countries, and there are 400 million WhatsApp Status users each day.
WhatsApp was founded by Brian Acton and Jan Koum in 2009. The two were former Yahoo employees who had left the company in 2007.
5. Company History
Brian Acton and Jan Koum, the creators of WhatsApp, met in 1997 at Yahoo. Before joining Facebook, Acton was denied jobs at Twitter and Facebook in 2009.
In January 2009, after he left Yahoo, Acton persuaded five former friends at Yahoo to invest $250,000 in seed funding, and Acton became a co-founder and was given a stake. After months at the beta stage, the application launched in November 2009 exclusively on the App Store for the iPhone. In January 2010, support for BlackBerry smartphones was added, and subsequently for Symbian OS in May 2010 and for Android OS in August 2010. In August 2011 a beta for Nokia’s non-smartphone OS Series 40 was added.
WhatsApp 2.0 was released with a messaging component and the number of active users suddenly increased to 250,000. Acton was still unemployed and managing another startup, and he decided to join the company. After months at the beta stage, the application launched in November 2009 exclusively on the App Store for the iPhone. Koum then hired a friend who lived in Los Angeles Chris Peiffer to develop the BlackBerry version, which arrived two months later.
6. Whatsapp Statistics
1. WhatsApp crossed the milestone of 1 billion daily active users in February 2017, making it the most popular messaging app worldwide.
2. In 2016, India was the biggest market for WhatsApp with over 160 million monthly active users.
3. In terms of mobile app engagement, a study by Statista found that WhatsApp is mentioned as one of the most frequently used mobile apps among U.S. consumers at least once a week.
4. Since its launch in 2010, WhatsApp has had more than 100 million downloads on Play Store alone and has become one of the most downloaded apps ever.
5. The total number of downloads of the application across all platforms reached over 1 billion as of 2016, reflecting its popularity and status as one of the best cross-platform messaging applications available currently.
7. Business Model of Whatsapp- Explained!
Whatsapp has a very unique and interesting business model, which has made it a massive success. Generally, we have seen that most of the mobile apps are free to download and use, but there is some premium content within them, which can be purchased. But Whatsapp messenger is a completely free app (except for the first year) with no premium content or anything like this. So how does Whatsapp make money?
One of the biggest reasons why Whatsapp has not been able to monetize its users is because it doesn’t want to give ads on its platform. It wants to keep it as clean as possible for the user experience. But then again, we all know how important money is for any company to survive in such a competitive market. So if Whatsapp cannot sell ads on its platform then how do they make money?
8. WhatsApp’s business model is simple and involves no cost.
WhatsApp’s business model is simple and involves no cost. The app is free to download and use, and there are no ads or in-app purchases. However, the service has a few caveats.
The first caveat is that WhatsApp must be connected to a phone number. It can’t be used without it, which makes it less privacy-friendly than true end-to-end encrypted messaging apps like Signal.
The second caveat is that WhatsApp has a limited lifespan on each device before you’re required to re-verify the app with the phone number. This keeps the app from being freely transferred from one device to another and prevents people from signing up for multiple accounts with independent phone numbers. You can use one account on two phones if you like, for example, but only if both phones have the same phone number.
9. What about the subscription fee?
For the last couple of years, WhatsApp has been testing a subscription model in various countries. This model will give you the option to pay for using WhatsApp every year.
WhatsApp is free to download and use for the first year, then $0.99 per year after that. If you’re already a user, your subscription will start at the end of your free one-year period. And if you decide not to subscribe, you can continue using WhatsApp as normal. The only difference will be that you won’t have access to customer support via the app.
10. FAQs On How Does Whatsapp Make Money?
However, there are several questions related to how does WhatsApp make money that remain unanswered to this day:
Does WhatsApp charge for its service? No, it doesn’t charge users anything for its service!
How does WhatsApp make money?WhatsApp generates revenue from businesses rather than from its users.
What is the revenue model of WhatsApp?Let’s take a look at the revenue model of WhatsApp to understand how it makes money:
WhatsApp API: The new API launched by Whatsapp will allow companies to connect directly with their customers through Whatsapp after they have received permission from their customers.
WhatsApp runs on a subscription model that nets it US$ 9.6 million in revenues in the second quarter of 2014, but it is also launching some new features that might give it another substantial source of revenue in the future. The company says it’s trying to establish its social network within the chat app, similar to Facebook or Twitter, where users can follow other users.
This creates a potential source of revenue for WhatsApp; companies could pay for prominent placement in this new feature. As of November 2014, WhatsApp had about 600 million active users regularly sending messages, with an average of 1 billion messages being sent daily.