WhatsApp is the messaging application most popular on the market, both on Android and iOS. In 2014, Facebook bought the messaging app at a price of 19.000 million dollars, a purchase that continues to generate controversy to this day. The amount of money so high that the social network paid is something that undoubtedly generated many comments.
Why did Facebook pay so much money for an app that is free? Many still do not understand this purchase or the reasons behind it. Even many question how WhatsApp currently earns money. Therefore, we are going to talk more about this topic below. The idea is that in this way you will be able to find out more about the business behind the most popular instant messaging application on the market. Since this is something that has been changing over time, since the app was officially launched on the market.
whatsapp payment
Years ago, before Facebook bought it, the app was free to use for the first year. As many of you may know, because surely at the time you have paid for it, once the first year of use had passed, you had to pay the equivalent of 99 cents of a dollar to renew this app license, so that we can continue using in the future, to have our account forever.
This amount of money is something that seems small, but if you take into account that at that time WhatsApp was an app that had a massive adoption (we are talking about hundreds of millions of users), the amount becomes millionaire in this case. This was the system that the app used for a while, but it was also ended a few years ago. Even after stopping this system, the application continued to generate profits in the millions, something that undoubtedly raised doubts among users. How does WhatsApp earn money after stopping using the payment system?
How WhatsApp makes money
A well-known phrase in these cases is when there is no product, the product is you. This is something that could be applied in the case of the instant messaging app. There is a lot of talk about WhatsApp about the fact that we do not pay with money, but that we pay with the data that we give to the application for using it on our devices, due to the permissions that are granted when we use it. This would be the business model in this case, similar to that of the main social networks in the market.
Advertising is not something that is used in WhatsApp, so it's not something they make money on (at least not yet). Since there has been speculation for a long time about the possibility that they will introduce ads in the states in the app, a way to monetize the application, but at the moment it is not something that has happened, nor is there data on when it will to happen, if it ever really happens. So this is not a source of revenue for the app, unlike other platforms like Facebook, where advertising plays a determining role, both for revenue and the data they have about users.
Information they handle or to which they have access
During the WhatsApp acquisition process, Facebook assured that they had no reliable or automatic way of relating or link the accounts of WhatsApp and Facebook users. Although this was something that seems to have been announced simply to obtain the necessary permits for the operation to obtain the green light from the European Commission. Once the operation was completed, the social network announced that they were going to start combining this data, something that generated controversy in the EU.
This topic caused a discussion about the amount of data that WhatsApp handles. The application shows off its end-to-end encryption and preserves the privacy of the messages that we send in it. Although not much is said about the metadata to which they have access and the connection of this information with that handled by Facebook. This is something that has generated a lot of controversy, as it is one of those changes to the terms of use that were announced for some markets.
The privacy measures that Apple introduced in the App Store allow us to know more about the data that apps have access to, as is the case with WhatsApp. In the case of the messaging app, it is clear that it collects contacts from our phone, as well as commercial data when we use Facebook services, or the IP that can be used to locate us with a certain precision. In addition, it is an app to which we give many permissions. The permissions it asks for to work on our phones are: Microphone, Storage, Contacts, Photos/media/files, Phone, Location, Identity, Wi-Fi info, App and device history, SMS, Camera, and User ID. device and call information. So this is information that they have access to on all phones (about 2.000 billion worldwide) where it is used.
WhatsApp Business
Do not forget that WhatsApp Business was officially launched in 2017, the business version of the messaging app. The idea behind this app, at least in the Facebook ad, was that small businesses could communicate with their customers, show them the products they sell or the services they offer, as well as answer questions they have during the shopping experience. . Thus, users will be able to see the products that are sold, make the purchase or contact the company, all within the application itself. This gives the app greater power, since it was initially launched in emerging markets, where many businesses now depend on this app and its services.
There has also been talk for some time about the company's plans to introduce payment features in this version of the app. So companies would have to pay WhatsApp if they want to use some features in this app. There are no details at the moment on this subject, but it is not ruled out that they will be official at some point soon. This would be a way to monetize the app even more.
Although the really interesting thing is that WhatsApp Business also gives access to a huge amount of data. The app can generate millions of dollars from its database and Facebook integration. So again it is these many data that generate income for the firm and are what interests them, which is why this app is promoted a lot among companies and it is sought to be used more, as a way to obtain more data.
WhatsApp and Facebook integration
This is the dream or the plan of the company behind the social network, now called Meta. It is also something that has been going on for some time, there have been attempts, but various bodies in various countries are putting up obstacles. Even the purchase of WhatsApp by Facebook It is something that is in danger in the United States, because they are trying to reverse it due to the monopoly position that the company obtains in this market, since they also own Instagram.
Remember that last year WhatsApp announced a change in its terms of use, some changes that affect users outside the European Union, where privacy laws and regulations prevent those changes. These changes force users to share more data with Facebook, which is precisely something that will allow more income, by having more information about users, which can be sold later. Data such as name, phone number, mobile device in which it is used, transactions made, locations, associated contacts and more were those that were affected by this change of rules in the app, again, a change that does not affect users within of the European Union. These changes generated controversy, as well as the abandonment of many users, who have switched to other more private alternatives such as Telegram or Signal.
This is something that seems to be a step that about this integration between Facebook and WhatsApp, something the company has been working on for years. So it is a controversial issue, which will continue to make headlines, especially given the plans of the social network, which continues to try to make this happen, but in several countries it sees limitations imposed or even the purchase of WhatsApp is something that it is trying to reverse, without knowing at the moment what will happen. We will have to see what will happen in the future in this regard, because it is something that will change the business model, but it could also cause many to stop using this app.