What this world does not lack are various messengers.
Active users feel it especially well, because they had to install several of them at once in order to keep in touch with all contacts.
We are used to judging about the success of this or that messenger by the number of active users.
Judging by this factor, WhatsApp is definitely “the king among small chats”, because every month the average audience is more than 900 million people.
Nevertheless, they do not pay anything for using the app.
That’s why a question immediately appears: How does WhatsApp make money, if it’s completely free?
What WhatsApp is?
WhatsApp can be described as a cross platform messenger.
It is designed for the owners of iPhone, BlackBerry, Nokia, and other phones, which operate on Android and Windows Phone.
The app allows exchanging free text messages.
You do not have to pay for SMS anymore – it’s enough to install WhatsApp Messenger and your friends will always stay in touch.
How WhatsApp makes money by ranging expansion at first, and then receiving payments?
The secret of messengers is hidden in the number of its users, because millions of people run this service every day.
They occupy the third place after Facebook and games in the popularity rating among the smartphones’ owners.
According to the data from Statista.com the number of customers is constantly growing, and for this moment WhatsApp has more than 700 million active users.
The specialists predict the app will make more than a billion till 2017.
This is how WhatsApp makes money: the first year of using the app is free, then you are going to need subscription and every year a user pays $1 per year.
Analysts are convinced that the WhatsApp’s strategy greatly limits the possibilities to make money.
For instance, having 450 million users, the profit is only 20 million dollars.
It’s just the price the company makes on people, who use the app more than a year.
However, the representatives of the app do not worry about monetization and never say how many paying users they have.
During the common conference with Facebook, the inventor of WhatsApp Jan Koum said monetization was the future business and then it was not the priority.
He explained how WhatsApp makes money: the company is focused on the increase in number of users and gathering the largest subscriber base, the stable schemes how to make money will be added later.
How did WhatsApp make money before the sale?
WhatsApp inventor Jan Koum, a young entrepreneur whom no one knew before, has rapidly got to the Forbes ratings, and his fortune is more than 7 billion dollars.
Besides, his project almost does not make money.
However, investors estimate it in billions of dollars.
WhatsApp belongs to the second generation of messengers, which are installed on the portable gadgets, which keeps out the services like ICQ, which are used only on the stationary computers.
Huge companies are interested in messengers because it’s a great possibility to offer various services on their platform.
Firstly, WhatsApp for IOS was paid, though later the decision was made to cancel the fee for its purchasing and make the service free for such platforms as Android, iPhone, Windows Phone, Black Berry and Nokia.
Taking into account the present number of users, Facebook will need more than 20 years to pay back the investments in WhatsApp.
Facebook front office says that at this stage they do not even think how to make money and do not take any measures in this direction.
Jan Koum thinks that it’s worth thinking about profit after the number of users will be more than 1 billion and there will be 5 billion of smartphones’ owners, who will potentially pay money to WhatsApp.
A great advantage is the least expenses on maintaining the team.
One technical operator services more than 14 million WhatsApp users.
How WhatsApp makes money if this service is free from advertisements, games and hidden payments?
The rapidly growing number of messenger’s audience may be explained by the following reasons:
- Free using.
- The possibility to refuse using plenty of accounts by simply using your phone number.
- The access to the various useful functions.
- The absence of the standard advertising model and targeting.
The WhatsApp inventor is totally against ads, games and various tricks, that’s why many people want to learn the secret how WhatsApp makes money.
The monetization way is extremely simple: the emphasis was made that during the first free year of using the app, people will get used to it and will not have any desire to part with it in the future, that’s why they’ll prolong the constant subscription in order to always stay in touch with their friends.
WhatsApp used to ask their users to start paying $0.99 per year from the second year of using the messenger.
How WhatsApp makes money after Facebook bought it?
Not long ago the huge world-known social network Facebook bought WhatsApp.
The app cost them 19 billion of dollars.
- The app had 450 million of active users when it was sold.
It was previously mentioned that the Facebook CEO Mark Zuckerberg announced he expected WhatsApp to bring money to the company.
However, it will happen not earlier than the messenger gathered a billion of users.
On the Digital Life Design (DLD) conference in Munich Koum announced that the number of people, who use WhatsApp, has almost reached a point of billion.
According to him, the fact that Facebook bought WhatsApp let the messenger not to concentrate on developing the subscription model, but focus on the application improvement and audience expanding.
WhatsApp profit is kept in secret.
At the time of the deal with Facebook the company announced that its profit in 2013 was about 20 million dollars.
This app is a free messenger, which has no payments, including hidden ones.
Unlike the similar services: Line, We Chat or Kakao Talk, WhatsApp allows only sending texts.
It has no additional ways of monetization, and people do not pay for talks or texts.
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However, the company considers some possible ways how they can make money by adding services and establishing billing.
According to the insider’s information, the company is going to charge the air line companies and companies like Uber for the possibility to send WhatsApp members their texts.
Visitors also wonder whether it is going to show advertisements.
The company does not plan to add them, but within a year it will study various possibilities of using WhatsApp for communication between various companies and organization with their users.
For instance, a person may discuss in messenger some fraud schemes with the representatives of the bank, or the flight delay with the air line company.
The company plans to make the world more communicative and open, and unite billions of people.
The future of the messenger is in its multifunctionality, because it gradually becomes the analogue of the internet-portal and plays an important role of the irreplaceable mediator.
While you think how WhatsApp makes money, you can enjoy using it for free, which allows you staying in touch with your close people.