How Facebook Plans to Monetize WhatsApp

Facebook may soon generate revenue from its WhatsApp messaging service. As explained by Reuters, the social media giant is currently testing a paid feature that allows businesses to chat with customers within the app.

About WhatsApp

Developed in 2009 by former Yahoo! employees Brian Acton and Jan Koum, WhatsApp is cross-platform mobile messaging service designed smartphones. Users can make calls, stream live video, send text messages, photos, documents, audio clips, phone contacts and more. All data transferred through WhatsApp is encrypted, ensuring that users’ privacy is not jeopardized.

On February 19, 2014, Facebook announced its largest acquisition to date: WhatsApp for a cool $22 billion. Acton and Koum’s messaging app had already received a $1.5 billion valuation in a venture capital fundraising round just months prior. However, market analysts were still shocked to hear news of Facebook’s pricey acquisition.

Monetizing WhatsApp

Since acquiring WhatsApp more than seven years ago, Facebook has done little to monetize it. Instead, Facebook has worked on its app, Facebook Messenger.

Nonetheless, WhatsApp offers a lucrative revenue stream for the social media giant, as it currently boasts more than 1 billion active users. And reports indicate that Facebook is looking to make money with WhatsApp by offering a premium version of the app to businesses.

Businesses can already use WhatsApp, but new reports suggest that Facebook will soon offer a special paid version of the app. Businesses using this version of WhatsApp will receive a green badge next to their name, telling users that the business has been verified by Facebook. Therefore, businesses could potentially use WhatsApp to handle customer inquiries, complaints, feedback and other correspondences.

While Facebook has yet to verify these reports, WhatsApp Chief Operating Officer Matt Idema confirmed that it does plan on “charging businesses” to use the app. Unfortunately, we don’t know the details of how or when this will happen.

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Dil Bole Oberoi