How WhatsApp Uses its Innovative Money Making Model

WhatsApp does not make money by selling space on its platform like other messaging applications.

It also does not offer premium services which could make it unnecessarily expensive for its users. However, that does not mean WhatsApp is broke. It makes money through innovative ways that makes it different from other messaging apps such as Line and WeChat.

WhatsApp was valued at a staggering US$ 19 billion when Facebookacquired it. This confidence Facebook investors had in WhatsApp is a stark indicator that the company is worth billions of dollars courtesy of its creative money minting strategies.

Annual subscriptions

After one year of trial users are required to purchase WhatsApp in order to continue using it. Subscriptions for WhatsApp cost only US$ 0.99 per user. In 2013 alone, the total revenue that WhatsApp amassed from subscription was over US$ 20 million. This revenue could have been more if all users paid for WhatsApp. Additionally,WhatsApp keeps extending the trial period for its loyal users. This denies it additional revenue.

However, WhatsApp has consistently stated that it is concerned about growth of its customer base and not getting revenue from the advertisers. What’s more, the parent company, Facebook, supports WhatsApp and having such a formidable backing only makes WhatsApp focus on client satisfaction rather than monetary benefits.

Growth targets

Analysts predict that in future WhatsApp may start charging for advertisements once it achieves its desired growth targets. This strategy clearly makes WhatsApp competitors sit uneasy since they don’t know what WhatsApp has up its sleeve.

Apple users also give WhatsApp additional revenue since they download the app for US$ 0.99 on the iTunes store. Given the useof iPhone across the US andEurope is substantially high as well as iPhone usein developing markets, WhatsAppis getting huge bucks from Apple subscribers as well.

Troves of personal data

WhatsApp is privy to large troves of personal data it gathers from its users. In this regard, speculatorsargue that it could be selling the data to multinational companies interested in deciphering consumer habits and tastes. This, if true, could be earning WhatsApp a lot of revenue.

Third parties also market WhatsApp by displaying it on their websites. This makes WhatsApp save on advertising costs, thus increasing revenue. It is in the interest of third parties to advertise WhatsApp in order to make their products more appealing since they share their products via WhatsApp, thus making the products visible to clients.

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