We all know that WhatsApp doesn't show any ads then from where does it earn money? In this article, we are going to know how WhatsApp earns money and what is the business model of WhatsApp.
ABOUT WHATSAPP
In 2009 two persons named Brian Acton and Jan Koum former working jointly in YAHOO as an employee for 9 years. Later on, they left their job and applied for jobs on Facebook and Twitter but got nothing except rejection. later on, he posted on Twitter.
And it's too ironic then that after 5 years Mark Zuckerberg CEO of Facebook brought WhatsApp in $19 million.
HISTORY OF WHATSAPP
It is the story of that time when Jan Koum got a rejection from Facebook and Twitter he goes to the Gym every day at the Gym time many of his friends make a call to him. He always was unable to pick up the call. In this need, they developed WhatsApp which really means 'what's up ' or what's going on. At the time when they go to the Gym, they update a status 'at Gym' for informing their friends he is in Gym. Far from that many of his friends installed this app and start updating their status: at the park, at the temple, at the job, at school. in a great mass.
EMERGING WHATSAPP
From there passing with the time people started messaging or giving information using this application. Although at that time only one application was available BlackBerry Messaging (BBM) for messaging this benefit was only applicable for Blackberry users.
With this idea, Jon Koum and Brian Acton launched their application 'WhatsApp', which was the great revolution of that time for messaging in that era itself. And within a few days, WhatsApp got 20000+ downloads without any advertisement and got funding from many companies. Hence, got organic growth with passing from friend to friend it got its downloads. Within 2 years it come among the top 10 iOS applications. As with 2009, it was too expensive to message and make telephone per minute it charges much. It grew mostly in countries like Europe Asia and Africa it can't grow too much in countries of the Americas as there was 200 message and free calling at that time.
As WhatsApp is a free messaging app it doesn't charge any fees to the users. The expense WhatsApp causes is to text verification text to the new users. WhatsApp started charging $0.99 per year and uses this money to run smoothly WhatsApp and updating features like adding pics and videos and flourishing their workers. In January 2016 WhatsApp became a totally free application removing $0.99 fees from users as many countries with many emerging users like India can't afford it. In 2011 starred as the top app. With its simplicity and to-the-point features everyone was impressed with WhatsApp.
Further, Brian Acton stated their policy that 'No Ads, No Games, No Gimmicks'. And being always to the point. Within 3 years WhatsApp emerged as a profitable company. Later on, Jon Koum stated that 'Our product is our passion, your data isn't even in the picture.' which means we are not interested in your data, it is always protected and safe. Facebook in 2012 tried to buy WhatsApp but the deal got finalized in 2014 with $19 billion with their employees hired by Facebook. SEO of Google Sundar Pichai also tried to buy WhatsApp but was unsuccessful.
WHY DID FACEBOOK BUY WHATSAPP?
As we know, there were not many applications for messaging, some of them exist like Wechat, Kik, Viber these are some of the applications used for messaging but it was on a very small scale. To deduce the competition as WhatsApp was emerging as a powerful and successful among there. hence for no competition zone, Mark Zuckerberg brought WhatsApp. As well Facebook gets an independent operating system and employees working with WhatsApp.
But this story doesn't come with a happy ending. Facebook started pressuring employees of WhatsApp although he expends $19 billion to buy WhatsApp. He started forcing employees to work on the program and do better and generate profit from it. In order, WhatsApp started doing malpractices. In September 2017, Brian Acton resigned from WhatsApp stating he can't compromise with his rules. No longer did Jon Koum works with Mark Zuckerberg and within a few months he also resigned from WhatsApp stating that: he was not happy with the new data privacy policy of WhatsApp and can't tolerate it. At the end of 2017, Mark Zuckerberg had full control over WhatsApp.
A NEW PHASE OF WHATSAPP
In 2018, WhatsApp launched his WhatsApp Business application for big business and started making money from working on it. It links new businesses and makes a platform for them to expand their business more by linking their WhatsApp with Facebook. In this case, now with WhatsApp, he started advertising Facebook indirectly. Now users can join Facebook with just a click. These companies use WhatsApp Application Programing Interface (API) and promote their products and businesses.
WHAT'S WHATSAPP RIGHT NOW DOING?
WhatsApp now earns with the policy with the WhatsApp business applications. Hereby companies get 24 hours free messaging facility to reply to their customers if it fails to do so companies will have to pay fees according to the Cost per message in Euro. It is different in different countries. In India, WhatsApp charges €0.0038 for the first 250000 messages which are equal to ₹0.30. Here the question arises who does use these APIs companies which have large-scale mass production and are connected to Billions use these APIs like Flipkart, Meeshu, etc.
In 2020, WhatsApp launched its WhatsApp Payment Application to make payments. At present WhatsApp charged 3.99% of transactions on every transaction. With charging $4 to $12 on every transaction. Till now it had charged ₹1.4 billion dollars with a total of ₹2.6 million transactions making a profit of ₹1.4 billion. With downloads of 0.02% ratings.
In India, WhatsApp is now not much powerful. In 2019, with a generated revenue of ₹68.4 million with making a profit of ₹5.7 million, spending ₹34.3 million on employees and ₹1.3 million on setup and legal fees. In 2018 it made ₹5 lakh profit with ₹1 million to ₹5 million investment.
In April 2020, WhatsApp made a partnership with Jio Mart which means they are planning to make WhatsApp a hub for purchasing and selling goods and products on a big scale emerging as a shopping platform.
WHAT DOES HAPPENED TO JON AND BRIAN?
Brain Acton and Jon Koum started a non-profitable Signal Foundation (Signal). It has a superior data policy. It's totally free to use an application with no profit-generating. Acton later stated that 'They will not ever run after making money whenever they do so they have to compromise with the data policy.'