Hi everyone, WhatsApp, a free messaging application present in mobile phones of almost everyone these days. Yep, WhatsApp has, no doubt, made messaging easier for us. But have you ever thought How does WhatsApp earns money? Being a free application, it does not demand any fee from you to message your friends neither it shows us any Ads like YouTube. Still, WhatsApp generated a revenue of $ 382 million. Then where is this money coming from? This is the question we are going to answer today. So, get ready for this exploration.

Well, for understanding the business model of WhatsApp, we need to know a bit of journey of WhatsApp. So, Let’s get the context.

Two former Yahoo employees-Brian Acton and Jan Koum in February 2009 founded WhatsApp. You would be surprised to know what was the app initially meany for? Initially, WhatsApp was meant to show statuses in phone’s contact menu-either a person was at work or on call. The initial versions of WhatsApp kept crashing, Koum started looking up for new jobs while Acton kept working on other startup idea parallelly.

How did it become an instant messaging app? In June 2009, Apple launched push notifications allowing users to get pinged even when not using the app. This proved to be the turning point for WhatsApp. Koum took the opportunity and updated WhatsApp so that people could get notified every time their friend changes status. But users used this feature in yet interesting way. They started pinging each other with status like "I am stuck in traffic” or “I am sleeping” and stuff like that. This was the time when WhatsApp started as an instant messaging app. This was the starting point of journey of WhatsApp 2.0.

By February 2013, WhatsApp had 200 million active users and was valued at 1.8 billion Dollars. This is probably the best example of why we should keep ourselves updated with time.

Well, yes, WhatsApp does not charge any fee from you to message and chat, but it did. If you would have been someone who used WhatsApp before 2016, then you would have known about the fee charged by WhatsApp. Before 2016, WhatsApp charged a fee of 1 $ when it was installed and then an annual subscription fee of 1$. However, to attract wider audience, this business model was discontinued by WhatsApp.

Seeing growth of WhatsApp those days, even Google made many acquisitions offers to WhatsApp in 2010, which were all declined. But Facebook bought Meta for $19 billion in 2014. Why? Facebook noticed that youths preferred to use WhatsApp instead of Facebook. So, to keep up with time Facebook simply bought WhatsApp. WhatsApp also updated a lot after that. WhatsApp introduced a lot of features like voice call, video call, end -to-end encryption (famous in India for wrong reasons). And, recently, just a year or so ago, WhatsApp launched WhatsApp payments feature as well.

But what happened after the initial business model of subscription fee was taken Down? Almost all of us use WhatsApp Messenger and the revenue comes from WhatsApp Business. WhatsApp Business was launched in January 2018. The objective of this app was to allow small business to communicate with consumers. But, how will a small business pay? That’s why WhatsApp Business is also free . Then where is this revenue now coming from. Here finally comes WhatsApp Business API. This feature was specifically designed for big businesses. This feature allowed businesses to automate sales and support processes. This when clubbed with right software, businesses can automate conversations, use AI and even integrate e-commerce platforms. Now, WhatsApp charges a fee from these businesses to reach out to their consumer base using WhatsApp platform sending them promos and messages. Well, question is why are these businesses willing to pay WhatsApp? Reason being WhatsApp provides a huge userbase to these businesses and hence the fee charged per user scales down to nominal amount and hence is more economically feasible for these businesses.
I hope you understand how you as a user are used to allow you to message for free. Apart from Business API model, WhatsApp earns from WhatsApp Payments and is also potentially accused of selling users data to earn money.