How friends, how are you ? Hope you all are well and healthy. I am sure many of you are using WhatsApp or have used WhatsApp sometime. Messages can be exchanged through WhatsApp just like any other messenger application. Apart from exchanging any messages, video or audio calling, photos, videos can also be exchanged here.
WhatsApp is an application, where you don’t need to be friends to talk to someone. There is no obligation to be friends with someone in order to chat with them like Facebook. Here, if the mobile number of the person on the other end is saved in your phone, then you can contact him normally like we do SMS on mobile. There are no charges for local or international calls. Here you can make unlimited free video or audio calling and also exchange pictures, videos or any kind of documents.
WhatsApp is an American company founded in 2009 by Brian Octen and Jan Koum. Both of them were former employees of Yahoo. After leaving Yahoo, they applied for Facebook jobs but did not get the job. Then they both created the WhatsApp app together.
First, to use WhatsApp, you had to recharge 0.99 dollars every year. But in 2014, when WhatsApp reached 400 million users, Facebook bought WhatsApp for $1.5 billion dollar.
But the interesting and noticeable thing is that, despite WhatsApp being free, but no ads are shown here. Where other platforms like YouTube, Facebook, Instagram etc earn money by showing website ads, WhatsApp allows us to use it for free and also without showing any kind of ads. So now the question may be how WhatsApp makes money. So friends, in this article we will try to discuss in detail How does whatsapp make money ?
Table of Contents
What is WhatsApp ?
WhatsApp is a free, multiplatform messaging app that lets you make video and voice calls, send text messages, and more. With over 2 billion active users, WhatsApp is especially popular among friends and family who live in different countries and want to stay in touch.
WhatsApp’s Business Process ?
WhatsApp analyzes all the information we send to each other, share, upload photos, and find out what you like, what you are interested in, what you want to do now, what kind of shopping you want to do. Data is collected on own servers.
Facebook advertises based on this information. You’ll notice if you’re thinking of buying something. However, you will see such ads on your Facebook homepage and when you open various Google websites. The same is called target audience. Apart from Facebook, Instagram, YouTube use this information.
What is the business model of WhatsApp ?
It is an application that keeps us connected with family, friends and colleagues. We use the functions of WhatsApp for various purposes.
Now the question comes, what is the business model of WhatsApp and how was the company’s earnings in the initial years. Friends, the most important thing to earn money is business model. If people like the model then people like to use it.
Value proposition : WhatsApp has given a lot of importance to its users. The core value proposition of the brand includes its attractive and trustworthy features and its accessibility, affordability, simplicity, low-risk element and brand identity.
Also, the security standards of WhatsApp are strong which reduces the threat. It sends encrypted messages and guarantees that every communication transmitted through the app has a different lock and key. This feature creates trust among the customer.
Customer segments : WhatsApp users are mostly smartphone users. This software is a costly device among international users as it allows them to connect with relatives, friends and colleagues who are not in their home country. Business heads also use the app to communicate with their users and organize promotional events.
Focusing on Partners : The WhatsApp team has built valuable relationships with more than 50 carriers around the world. WhatsApp often enters into strategic agreements with mobile firms to expand its services and user base. App shops, OS integrators and various banks are among the other important partners of WhatsApp.
Focusing on Resources : A central part of the WhatsApp business model is focusing on resources. They have three types of resources which are physical, human and organizational. WhatsApp’s unique software suite is the company’s most important organizational resource, with more than 2 billion people worldwide.
These assets also include the brand’s key partners, such as telecommunications carriers, device manufacturers, software engineers and others, who helped the brand grow its user base.
Channel : The main outlet of WhatsApp is its smartphone app. Marketing materials used by a business to market its goods include social media postings and its site. Other options include Google Play, the App Store, and other portable devices.
Customer relation : Customer relations play an important role in the success of the app and WhatsApp keeps this in mind. Personal assistance is provided through confidential email support. Additionally, WhatsApp’s customer relationships include a zero-advertising policy, ethical use of the social network, truthful blog posts, and end to end encryption, among other things.
How does WhatsApp earn money ?
Currently, a total of 1.5 billion people around the world use WhatsApp. But we may have a question in our mind how WhatsApp earns money and how much money it earns. Because, after Facebook bought WhatsApp, WhatsApp is giving us full free service. We don’t have to pay anything and WhatsApp doesn’t show any ads. But how does WhatsApp make money ?
Facebook is taking advantage of you in another way by letting WhatsApp users use it for free. It’s not just that Facebook is losing money by letting you use WhatsApp for free. If you think about this very deeply, you will understand how they are profiting from you.
WhatsApp has a lot of data about those of you who use WhatsApp, and Facebook can use that data to find their target audience and show them ads. Now many may say that, what is this targeted advertising ?
Let’s say, you need an LED television. But your budget is $500. Now you search on google or any e-commerce site to buy that television. Now if you come on Facebook and see a $500 bicycle ad but naturally you don’t buy it. Because you need an LED television, not a bicycle.
Here you are not the right customer to buy that bicycle. Rather, if the bicycle had been offered here to someone else interested in the bicycle, it might have been sold. Similarly, if you were shown that LED television ad on Facebook, you would be their target audience.
But if it happens that you have a son, who needs a bicycle, then that ad will be useful. Here if the advertiser shows the ad targeted at your child then you are their main customer. If you find a bike for your child on an online platform, it will benefit you as well as the advertiser.
Your personal information is primarily used to serve ads. Detailed information about where you are, what you are searching for, what you are watching, which tune you like the most, etc. If it can be considered in the case of Facebook, Facebook knows this information about you. They know better than you what you like and dislike. Here by analyzing all your data they can come to a certain conclusion about what you are interested in.
Building an accurate picture of a customer or a complete understanding of that person’s interests, requires a lot of data about that person. Here is an analysis of your usage patterns to build a complete picture of you. Because you have a lot of data in WhatsApp and this data they use for advertising on Facebook. WhatsApp is primarily used to show ads to targeted audiences on Facebook. That’s why WhatsApp can be called Facebook’s data collector, where WhatsApp is collecting data for Facebook to show ads to specific people.
Although Facebook initially said that, we don’t have any user data from WhatsApp to show ads. But now WhatsApp has brought changes in that privacy policy. Where they will use your information only with your permission for Facebook, which was discussed and criticized a few days ago. If you do not accept the privacy policy, you can no longer use WhatsApp.
In the case of WhatsApp, I don’t think there is much to worry about sharing data with Facebook, because they are already taking our data. If we search something on the internet, go to a website or go to Facebook and if we are more interested in something, then we can see advertisements for that topic. Where in all cases, we are tracked and our personal information is taken. What’s wrong with WhatsApp taking our data there too ? But the fault here may be that, they are telling us that they don’t take any information from us, but secretly or openly take it.
There is no guarantee that your data is not already taken by WhatsApp. It used to be that Facebook was secretly using your data, now it is doing it publicly with your permission. Here it is up to them whether they have taken your information before. But with the way we’re being tracked online, we can assume that they may be taking our information somehow.
Currently, WhatsApp is asking for your permission to share your data with Facebook. Where these things have been said in their new conditions a few days ago. But there is no opt-out option, where as using WhatsApp you have to agree to their terms. And if you don’t agree to their terms, you can no longer use WhatsApp.
Another reason for not showing ads on WhatsApp is that, it is still looking at increasing its popularity. Here their main target may be to increase the number of users of WhatsApp. Which has brought them a lot of success. Currently, WhatsApp has around 2 billion active users. Now you may think that what will happen with this extra user of WhatsApp if there is no revenue from it.
So see, the main thing in online business is audience. In online business, the more customers you have, the better your business will be. This is a business strategy. Whatsapp may not show ads currently, but there is no guarantee that WhatsApp will not show ads in the future. In the future, when WhatsApp monetizes or shows ads, it may bring them more revenue than Facebook. But who said that WhatsApp is not bringing any profit to Facebook ? WhatsApp is making the same profit as Facebook, but much less than it is supposed to.
For example, to use WhatsApp’s business API, you have to pay some amount of money to WhatsApp. In that case WhatsApp is earning some amount of money from here. However, WhatsApp is currently not available for free in all countries. In some countries, you have to pay $1 to use WhatsApp as before. From here they are also earning some amount of money. So, WhatsApp is currently making some money, but not as much as WhatsApp needed to make.
Another section of WhatsApp is known as ‘WhatsApp Pay‘. It’s Like Paypal or Google Pay. WhatsApp is also earning some amount of money from here.
Last Word
We got some idea of ”How does whatsapp make money“ from the above article. But our WhatsApp may not be like this in the future. Maybe we can see ads on WhatsApp in the near future. We hope this article is helpful for you. If you like this article, Please share with your friends.
