This was obviously going to happen – Facebook wasn’t foolish to acquire WhatsApp for a whooping $19 billion. Jan Koum and Brian Acton might not have considered advertising on WhatsApp or making more money from the users who use it, as Jan said in an interview, but after Facebook acquisition sooner or later this was going to change. Though Facebook too isn’t considering chopping advertisements into WhatsApp, still it seems like company has been mulling other options carefully, one of which is to allow businesses to contact you directly.
Bloomberg has recently quoted Facebook CFO David Wehner stating at a JPMorgan tech conference in Boston that allowing B2C communication on WhatsApp can be a sound business opportunity for Facebook. However, he added that they’re still learning about this thing and it’s a longer-term option instead of near-term.
Until now no information has been provided about how Facebook will make money from this model and how will it be implemented, but it’s obvious that businesses will be paying for it. Company may use B2C interaction that marketers are already paying for on Facebook to make a Business model out of it for WhatsApp. Businesses may be allowed to interact with users via live chats, alerts or any other means. This can be used for customer support and other business interactions. Some of these features are already being tested in Facebook Messenger too.
Until now WhatsApp’s has been operating on an annual subscription business model, which allows the usage of service to every new user who signs up for free for the first year. After that year users are asked to pay a fee of $1, or Rs. 50 per year to continue enjoying the service. Company has achieved a very high level of scale with this model and is right now enjoying around 800 million active users around the globe. But despite this level of scale company’s current business model isn’t looking sustainable – it lost around $232 million in 2014 alone. As a result, the biggest question right now for Facebook’s investors is – How can this money losing machine be transformed into a money making machine? Answer, as you may assume, is far from clear as being ad-free is also a big USP in itself for WhatsApp. Now, it’ll be interesting to see how desperate Facebook is to implement this business model, and more importantly how it implements the model without destroying the usability of WhatsApp.