How WhatsApp makes money
Table of Contents
Introduction
WhatsApp is one of the most popular applications in the world, with over two billion active monthly users.
Despite its popularity, people worldwide do not know how WhatsApp makes money because WhatsApp is a free-to-use application with a policy called no advertisement. With such strict rules how WhatsApp makes money in millions.
In this blog, we will discuss in detail the revenue model of WhatsApp and How WhatsApp remains the leader in the messaging application industry.
WhatsApp’s business model
Some recent years ago, the WhatsApp business model was based on Freemium, meaning users could download and use WhatsApp for free, but they needed to pay to access some additional features.
WhatsApp founders Jan Koum and Brian Acton Decided that they would not be monetizing WhatsApp forever because monetizing WhatsApp can ruin the User experience, And users no longer want to use WhatsApp.
In 2016, the founder of WhatsApp decided to drop its freemium model and make the app free forever for everyone.
The real question is, if the founder of WhatsApp decided to drop the annual subscription, then how WhatsApp makes money?
Now let’s understand it in simple words. WhatsApp is free for personal use and not for business, so they make money from businesses; one such example is WhatsApp business API.
WhatsApp Business API Allows businesses to respond to customers in an automated way, such as appointment alerts and confirmation messages.
In 2018, WhatsApp introduced WhatsApp pay in the market, which allows users to send money from one user to another, and for each transaction, they charge a small fee.
The future revenue model of WhatsApp
Since WhatsApp is free for personal use, making it the most popular and used messaging app in the world, there is also some feature revenue model, which is an Interlink to the free users and the businesses.
Let’s understand it in simple words.
In the future, WhatsApp will charge businesses for the verification and APIs, and businesses will have the advantage of sending messages to users using WhatsApp.
If there are no users, Then to whom does the business send messages, and why will the businesses purchase API from WhatsApp?
Hence the organization makes the users free to use WhatsApp and helps businesses send messages by charging a small fee through API and verification.
WhatsApp’s financial performance
In a recent report, it was revealed that WhatsApp generated more than $906 million in 2022.
WhatsApp gained more than 2.2 billion monthly users by the end of 2022.
India is the biggest market for WhatsApp, with over 390 Million active users.
Facebook and Youtube are the only top competitors of WhatsApp in terms of users.
Does WhatsApp make money from data?
No, WhatsApp does not use user data to make money. The company’s founders, Jan Koum and Brian Acton, decided they won’t sell users’ data to make money from the whatsApp platform.
WhatsApp’s no-ad policy is the perfect example of it. Because most platforms use user data to run ads and target users, WhatsApp’s no-ad policy ensures this practice does not work in the organization.
WhatsApp’s end-to-end encryption secures the user’s data and ensures no third party can access the user’s data (Not even WhatsApp).
Even Facebook does not use WhatsApp’s user data to target ads, and there is not enough evidence that suggests the use of whatsApp data anywhere.
Also Read:
1. How to make money using ChatGPT
2. Future of Physical currency
How much does WhatsApp earn per day?
In 2022, whatsApp earned $906 million ( 12 months). From this data, we can calculate the daily revenue of whatsApp by total days in 12 months.
Let’s say 12 months = 365 days
$906 million / 365 days = approximately $2.48 million per day
From the data, it is estimated that WhatsApp earns nearly $2.48 million per day.
How does WhatsApp earn money without ads?
WhatsApp makes money from business API, and in the future, WhatsApp plans to make money by providing a blue tick (Verification badge) to the business.
How does Facebook make money from WhatsApp?
WhatsApp parent company Meta has said that they will not earn money from advertisements on whatsApp; instead, they plan to generate revenue through e-pay like WhatsApp pay and E-commerce services.
How much is WhatsApp worth
In the year 2021, the valuation of WhatsApp is $96.8 billion, but experts suggest that the valuation of whatsApp can go above $100 billion once that app starts monetizing on its platform.
Conclusion
We hope that you have understood in detail how WhatsApp makes money. WhatsApp does not sell its user data to make money and uses alternative ways to generate revenue in millions.
Through its end-to-end encryption, it has gained the trust of billions of users, and I believe this is the main reason that most users trust whatsApp over any other messaging application in the world.
These unique features make it more popular among the new generations.
How was this article reviewed for accuracy and trust?
Written and Edited By
Manish, Financial Blogger and SEO Expert
Financially Reviewed By
Harish, Chartered Accountant
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