WhatsApp has crossed the billion-user milestone, which adds an all-new dimension to the idea of monetization
Facebook Inc.'s messaging application, WhatsApp, has now reached the much-touted billion-user mark. Although the app was always expected to make it big but no one thought it would grow exponentially and become the most preferred messaging app for smartphone users. It now makes sense why Facebbok CEO Mark Zuckerberg agreed to pay a massive $19 billion to acquire the service two years ago.
The news about WhatsApp crossing the billion-user mark comes a week after it announced an outright discontinuation of the $0.99 annual subscription fee — making it absolutely free for users. More interestingly, WhatsApp made the announcement the same day, Google announced achieving the billion-user benchmark for its Gmail service.
Google has not shown any interest in the social media sector, but it continues to battle Facebook to keep maintain a stronghold on the web. Google has been more interested in the email form of communication while Facebook seems to focus on the personal aspect of a messaging service.
“WhatsApp began as a simple idea: ensuring that anyone could stay in touch with family and friends anywhere on the planet, without costs or gimmicks standing in the way.” the messaging app said in a blog post on Monday.
WhatsApp made the announcement in a blog post, three months after the last time it provided figures for its total and active users. In September, it reported having 900 million active users i.e. the service brought in 100 million users in the quarter that ended in December. Last month, WIRED Magazine reported that the service has 990 million active users, which indicates that a whopping 10 million users were added in the last 12 days of January alone — an impressive feat by any standards.
Global smartphone statistics reveal that many phones still do not use the app, hence there is still room for growth. Lately, Facebook and Google have been focused to get people from developing countries to connect to the web. Facebook’s Free Basics app offers less-fortunate people free access to the Internet and its services via a partner network carrier. Currently, roughly every one in seven people in the world use the messaging service.
As WhatsApp reports impressive figures, questions on the service’s monetization potential are now louder than ever, particularly after the elimination of the 99 cent subscription charge. Around the time Facebook acquired WhatsApp, the latter’s annual subscription brought in $10.2 million annual revenue, and because of the partial stock deal, it ended up being a $22 billion acquisition, according to Bloomberg
So Facebook got the messaging app it wanted two years ago and is doing better than it ever could on its own. The social media giant however still has to devise a concrete plan to make more money off WhatsApp.
Last week, Facebook CFO David Wehner said that the company is still experimenting with possible monetization strategies. During the investors call, Mr. Zuckerberg hinted that the app could be seamlessly transformed into a business-to-consumer platform, in addition to being a messaging service. The company is trying to integrate end-to-end encryption in the service. Given Facebook’s practice of being too complacent with US government demands to share user data, the encryption is not being planned to keep users' messages safe, but instead their credit card information.
Facebook wants to make WhatsApp a messaging service where you not only interact with others but can also buy gifts for them through it. Getting businesses a special account to interact with customers on WhatsApp is the most logical way to go about it. Furthermore, chatting options can be used to confirm orders, answer queries, and provide customer support.
WhatsApp has always avoided the ad-based model and wants to keep it that way — instead it wants to make money off businesses that make money off its users. The social media giant addressed WhatsApp’s future plans in the latest earnings report, as it reported 52% growth in total sales to $5.8 billion in the last three months of 2015, beating Wall Street estimates as the stock reached a new all-time high.
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