Neither any Ad, nor Fees, then how does WhatsApp earn?

 Whenever a new company is launched in the world of business, in most cases the main motive behind its formation is – “Earning money by giving your services to people.”

Making money from business is not an easy task. Therefore, to earn money, almost every company has its own special well-designed plan, which is called business model in the language of business.

Every company works according to its own business model after its launch and increases its revenue by helping people with its services.

For example – Facebook's business model is to connect people with each other and then show them ads according to their choice, taking money from the company that gives the ads.

You may be surprised to know that Facebook earns about ₹ 500- 600 / year from each ID by showing ads to its users, due to which the annual income of Facebook has crossed about $ 60 Billion (Rs 4000 billion) in 2018.

The business model of most of the popular online platforms like Google, Twitter, LinkedIn, Quora, Instagram, YouTube, Snapchat is also almost similar to Facebook's advertising BizModel.

Apart from this, the business model of some online companies is to take money directly from people using their premium services. Some such big online companies are – Amazon Prime, Netflix, Hotstar, Hulu etc.

But do you know what is the business model of the world's most popular messaging platform WhatsApp? That is, using which method does WhatsApp earn money?

If use WhatsApp then I have a question for you…

• Have you ever seen any kind of advertisement on WhatsApp in your life?

off course not!

• Have you ever paid to run WhatsApp i.e. have you ever bought a WhatsApp subscription?

If you have been running WhatsApp for the last 6 years then this cannot happen at all (Because from Feb 2016 WhatsApp is absolutely free for every single person in the world.)

So now the question arises that if WhatsApp neither takes money from its users nor shows them ads, then it earns money after all? What is his business model after all?

The answer is-“Till a few years ago, WhatsApp used to make money from Paid Subscriptions and today it probably earns through its giant DATABASE! Apart from this, he has many great BizModels with him for the future as well.

WhatsApp has changed its business models time and again as well and it is expected that it will do so many more times in the coming times.

As easy as it is to run WhatsApp, believe it, it is more complicated to understand its business models. That's why in this article, we have divided the business plans of WhatsApp from time to time into three parts – Past, Present and Future, so that you can understand them clearly.

Brian Acton and Jan Kaum, who once ruled the world of the Internet, worked in Yahoo (YAHOO!), After about a year and a half of hard work and long beta testing, WhatsApp became the most popular in November 2009. First launched in Apple's App Store.

One thing that has been commendable by the founders of WhatsApp from the very beginning, is that they always put their users above money and provided a very good interaction platform to the people without any hindrance.

Facebook founder Mark Zuckerberg had said during one of his interviews that one of the biggest reasons behind buying WhatsApp for a huge amount like 11 trillion rupees was - its very good user engagement i.e. it was the best app after Facebook on which People loved to spend hours everyday.

However, if we talk about the business model, WhatsApp has not been able to create any permanent BizModel for itself till a decade after its launching. He has adopted many Revenue Generating Strategies in his Lifetime and is thinking of adopting many in future.

However, if we talk about the business model, WhatsApp has not been able to create any permanent BizModel for itself till a decade after its launching. He has adopted many Revenue Generating Strategies in his Lifetime and is thinking of adopting many in future.

1)• Business Models of WhatsApp from 2009 to February 2016 (WhatsApp Former Business):

Seeing the increasing popularity of WhatsApp and the user database, WhatsApp, which was launched in November 2009, was bought by Facebook in February 2014 for $ 19 billion (about Rs 11 trillion). In this time period from 2009 to 2016, although WhatsApp earned a lot less money than its expenses, but whatever work it did, it earned mainly through these 3 ways-

A]• Revenue by App Downloading –

You may be surprised to know that whenever we download an app from App Store, Play Store, 9Apps or Up to Down, the owner of that app gets around $1 (Rs 65-70) on Per Download and now because WhatsApp (WA) is also an app, so it also gets paid on an average of $1 (which may be different in different countries) on every download.

As of February 2016 (Facebook Acquisition), WhatsApp had about 400 million users all over the world, that is, it had been downloaded 400 million times, which means that WA in its first 6 years (from 2009 to 2014) downloaded about 40 million users. Earned millions of dollars, which was a small source of WA's income. This is the Evergreen Business Model of WhatsApp, from which this app generates very little but revenue even today.

B]• By taking Fees from users (Revenue by Subscription)–

If you have been running WhatsApp for the last 8-9 years, then you must know that before Feb 2016, WhatsApp was not free but a PAID App. It was absolutely free for one year for users of all operating systems (eg- Android, Blackberry) except iOS, but after a year they were charged about $ 0.99 (then about Rs 55) annually.

iPhone users had to pay $0.99 when they installed WhatsApp from the App Store, there was no free plan for them; Because most of them are rich people who could easily pay such fees. It is believed that by taking fees from its users in this way, WhatsApp earned revenue of about $ 1 billion i.e. more than 60 billion rupees in Lifetime.

In the initial days, this method was very useful for WA, but now because after February 2016, this app is completely free for every person in the world, so this business model of WhatsApp no ​​longer exists.

C]• By Borrowing (Through Venture Capital)–

Although WhatsApp did not earn money in this way, but it made its service and business even better with loan money.

America's giant investing company Sequoia Capitals invested money twice (in 2011 and 2013) seeing the popularity of WhatsApp, which got almost 50 times more money in returns! Today WhatsApp runs under Facebook Inc, so it does not have any money crunch, but at the time when Six was started, at that time it had a huge shortage of money, which its founders and investors together completed.

This was the old business model of WhatsApp, which was changed by Facebook Inc in 2016 by making WhatsApp a free service. But can you tell the reason that when WhatsApp was earning 20 billion rupees in a year, then what was the need for Facebook to buy it by spending 11 trillion rupees. Why did Facebook need to make its own losses?

2)• WhatsApp Current Business Models from 2016 :

A)• By WhatsApp Biz App –

Whatsapp launched a special app for small merchants in February 2018, which they named WA Business. With this app, small businessmen can directly connect with their customers through Whatsapp and can increase their business.

Although this app is completely free right now i.e. Whatsapp company is not earning money from it yet, but it is expected that in the coming time this app will prove to be a trump card for the company.

B]• Using data in other services –

There is a difference of opinion among people that for what reason did the Facebook company buy WhatsApp for a huge amount like 19 billion dollars (which is more than the annual budget of NASA)?

It is believed that the biggest reason behind facebook inc's purchase of whatsapp was – “Its wide user network and huge database spread all over the world. By the way, WhatsApp messages are complete, that is, no one can read them except the sender and receiver. But still it is said that WhatsApp shares the data sent by you, location, photos, links, audio-video calls, status-story etc data with Facebook.

3)•Futuristic WhatsApp Biz Models-

A]• Connecting Customers Directly to the Company (Business Platform)-

There are many companies that do not understand the needs of their customers properly, that is, they cannot estimate what their customers want from them? And one of the biggest reasons for this misunderstood is the "great lack of communication between the company and the customers" (Lake of Communication).

Keeping this in mind, WhatsApp is preparing to bring a new feature, which will enable Verified Companies (✅) to chat directly with their customers through WhatsApp and it will be easier for them to do business. For this, those companies will have to pay a lot of money to WhatsApp, so that WhatsApp will be able to generate good revenue.

Last year, WhatsApp has also tested this feature, in which big airline companies like KLM and AirMexico participated. Hopefully, soon this feature will come in WhatsApp.

B]• Emergence of WhatsApp as a Payment App (P2P Payment)-

Keeping this in mind, WhatsApp is going to launch such a feature in developing countries like India so that people will be able to link their WhatsApp account with the bank account and use WhatsApp as a payment app as we are now using Paytm, Use PhonePe and Google Pay. WhatsApp has also done beta testing of this new feature and now it is preparing to launch it. After adding this feature to WhatsApp, there is every possibility of a big jump in the revenue of WhatsApp as WhatsApp already has a huge userbase and WhatsApp is also a reliable app.

So when people will pay from WhatsApp (like book tickets, pay bills) then WhatsApp will charge / commission some rupees from them and this will increase the income of WhatsApp.

C]• Connecting WhatsApp to Facebook and Instagram (Integrating WA, FB & IG)-

Facebook is doing a lot of work on integrating all three of its services (FB, WA & IG) in the same way as Google has already done it. Recently there was news that Facebook Inc. is working on connecting all three of its platforms together so that people can message their friends on Facebook and Instagram from WhatsApp and contacts from Facebook, Instagram to WhatsApp.

Apart from this, Facebook is also planning to connect its Marketplace feature to WhatsApp so that it can grow its business without showing ads to WhatsApp users. 

Overall, Facebook company is trying to increase its revenue by showing ads on its other platforms using the data of WhatsApp.