Ajinkya Khobragade
Connoisseur of Technology.
28w ago
Jan Koum, founder of Whatsapp hates advertisements. When Facebook took over Whatsapp in February 2014 for US$19 billion, Jan obliged Facebook to maintain Whatsapp add free now and forever.
So how does Whatsapp earns revenue?
Actually it doesn’t. Atleast presently.
It is vastly believed that Facebook uses Whatsapp to create data base and for behaviour tracking of users. Which they use to display adds on Facebook and other websites.
Intially Whatsapp use to Charge 1$ for 1 year of subscription but later that plan was cancelled. And since then WhatsApp is free for all.
In future WhatsApp might have some integrations which will accumulate profit for the company. As of now we know of WhatsApp Pay which will soon launch in India and Globally.
Presently WhatsApp is trying to accquire as many users as it possibly can. They already have about 1 Billion+ active users.
Peace!
Proshanta
44w ago
Facebook has access to a ton of personal informations ( your check-ins, location, likes dislikes etc.) all uploaded and saved on its server.
They use this data to improve their Ad Service. How?
They use this data to target specific person with specific ad.
For example, Suppose you went to a place or shopping mall “x” and you updated a status at “-at x” . Facebook will collect the information. When you will return home and open the facebook, it will show ads about the place “x” and some other related product ads as well. Even if you dont update any status and you have a phone with you, facebook can track your location.
Such targeted advertisements increases click rates that is beneficial to the advertisers. And you already know facebook has a huge active user base.
Facebook didnot actually buy whatsapp for money but instead purchased it
to increase user base further and
to access behaviour data and gain access to personal information to improve consumer targeting in facebook ads.
So how whatsapp helps to grow user base of facebook?
Well, with sms app, growth is exponential – when one person in a social group downloads and advocates using the app, many new users download the app in order to communicate with the original person. These new users then encourage other members of their social groups to use the app . Thus, by increasing market penetration , the app becomes indispensable and the user base grows.
How whatsapp improve consumer targeting in facebook ads?
Whatsapp also have access to your personal information. Whatsapp keeps track of all the messages you send and search for keywords. For example, if you text someone “ I really liked that nike shoe”, its algorithms are smart enough to understand your positive interest towards “nike”. Next time when will open facebook or any other website running facebook ads you can see ads of nike shoes.
Simply ,
They provide you free service and in turn use your information for their benefit.
Free service attracts more people – user base is increased – more user means more click on ads ,that too targeted ( icing over cake) – more click on ads means more advertisers will invest – thus more money.
Kshitij Giri
studied at Madan Mohan Malaviya University of Technology
17w ago
Whatsapp was developed by Jan Koum and Brian Acton in early months of 2009 as a Status update application (hence the name Whatsapp). It was further updated to Whatsapp 2.0 which transformed it into an Instant Messaging Application and started the real story. This Facebook-owned IM Application now provides service to more than 1 Billion users all over the world. But the question of how does Whatsapp make money has been in the minds of everyone ever since the beginning as Whatsapp proudly expresses its views against native advertisements and hasn’t been charging its users for a long time. There surely are some big plans in the minds of developers (and Facebook) regarding its revenue model.
How does Whatsapp Make Money?
No Revenue from Advertisements
Whatsapp doesn’t earn revenue through advertisements. The founders hated advertisements and created this ad free platform focusing just on great user experience and interface.
They wanted to create an instant messaging platform for the users andnot for the big companies to place ads. But at the same time, they had to pay their bills too. So they decided to come up with the paid version of the application where they charged an annual fee of $1 from the users.
Earlier Revenue Generation Strategy
Whatsapp got its first round of funding of $250k by five ex-Yahoo! friends who were granted a co-founder status.
The second and third round of funding was carried by Sequoia Capital whichinvesteda total amount of $60 million ($8 million in 2011 and $52 million in 2013) in Whatsapp Inc. This was the only source of income for the 50 staff members of Whatsapp. There wasn’t much expenditure involved in running the application; the primary cost included sending verification code to the users.This is why Whatsapp waved off the $1 subscription fees.
The current strategy of the founders was to position the brand as a synonym to instant messaging application. This required them to focus on gaining as many users as they could. This strategy of creating a network first and money after proved to be fruitful. After two long years of being wooed by Facebook’s CEO Mark Zuckerberg, Whatsapp was acquired by Facebook on February 2014 for $19 billion and all the employees were put to Facebook payrolls including Koum, who is now a part of Facebook’s board.
New Revenue Generation Strategy (Facebook’s Strategy)
Facebook acquired Whatsapp in 2014 for $19 billion and this opened many new doors for the application. Even the answer to ‘How does Whatsapp make money?’ changed after the acquisition
According to Whatsapp’s new terms, it is currently used as a user data generation factory by Facebook.Revenue generationis carried out by Facebook’s user targeted advertisements on Log In or Sign Up which, after using Whatsapp users’ account information, can now target ads more effectively and appropriately
Avinash Chandra
CEO, BrandLoom ($1m Startup). Digital Marketing Wizard.
17w ago
How does WhatsApp earn money without any ads?
Today WhatsApp does not earn any money and they are surviving on investments made by investors, who believe that WhatsApp has a fantastic potential and it will significant amount of money in future.
However, WhatsApp used to make money earlier. They used to charge US$1 per annum to the users of their services. At their peak they earned US$700 Million.
When Facebook acquired, WhatsApp, they decided to make it free to ensure rapid consumer adoption.
Today WhatsApp has more then 1.3 Billion users and now Facebook is looking for ways to monetise this platform.
Vansh
Mechanical engineering from Veerayatan Engineering Institute (2017)
38w ago
Facebook announced it spent $19 billion buying the messaging app WhatsApp. With this purchase, Facebook became the king of mobile messaging, but critics and competitors were concerned about how Zuckerberg would profit from this acquisition.Aswath Damodaran, a professor of financeat NYU,wrote a blog pos twith a few theories on how this acquisition could pay off. WhatsApp is used by 450 million people world wide to send an assortment of messages and photos. It’s free for one year and then the app charges you $0.99 per year in order to break even, Damodaran stresses that Facebook needs to focus on users because it’s staggering how many people use the app. The professor theorizes that 2.5 billion new users need to be added in order to make money off that small fee the app charges after the first year. Based on how popular it becomes, Aswath thinks WhatsApp could increase its $0.99 yearly subscription. One source of frustration could be ads. The WhatsApp founders refuse to run ads on the app, but As wath claims that Facebook could advertise the app on its own site without running the risk of losing users. Damodaran concludes his post by offering this strategy for Facebook figure out the best way to attract users and keep them, discover the best way to make a profit without scaring users away, and study how to make this app valuable to its business instead of strictly focusing on how to make money.
Cheers!
Robert Dow
studied at Nirma University
39w ago
At this point of time, it does not.
It’s like making an investment to gain profits afterwards. Just like Instagram or any other popular social app. They all started without any profit. And then they decided to slip the advertisements in, so that they can make profit.
Just like this someday Whatsapp will also slip ads in.
Ads do not always spoil the User experience. For example, Whatsapp can show you sponsor contents in the new Status feature. Just like Snapchat.
Peace.
daybreakonline.news.blog 