How does WhatsApp make money if it's free? Not so long ago, a large global social network, Facebook purchased WhatsApp application for $ 19 billion. The application is a free messenger, in which there are no payments, including hidden ones. So, how will Facebook make its money back?!
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Unlike similar services: Line, We Chat or Viber, WhatsApp can only send messages, it doesn't have obvious monetization tool, which are adverts. Also, users do not pay for conversations or correspondence.
In this regard, there is a natural question: how does WhatsApp make money, because Facebook does not invest so much money in the unprofitable projects. Founder of WhatsApp, a previously unknown young businessman Jan Koum, quickly got into Forbes ratings as his fortune reaches 7 billion dollars.
At the same time, his project does not generate revenue, but investors estimate it as billions of dollars. WhatsApp belongs to the second generation of instant messengers for portable devices, which supplants ICQ services, which are used only on fixed computer equipment.
Large corporations are interested in messengers due to the possibility of providing various related services on their platform. Initially, the WhatsApp application for IOS was for money, but later it was decided to cancel the payment the payment and make the service free for download on such platforms as Android; iPhone; BlackBerry; Windows Phone; Nokia.
How can WhatsApp make money?
Investments without payback periods
Taking into account the current number of users of Facebook, it will take more than 20 years to recoup investments in WhatsApp. Facebook management claims that at this stage it does not even think about monetization and does not take actions in this direction. Jan Koum also believes that profits should be considered after the user base exceeds a billion people, and there will be 5 billion smartphone owners in the world who will potentially pay WhatsApp money.
A big advantage is a minimum cost of maintaining the team. However, the company is considering some possible methods of monetization based on the increase in the number of services and the emergence of billing. According to insiders, the company plans to charge payment from air carriers and companies such as Uber for the right to send messages to users of WhatsApp.
The extension of the borders first, payment later
The secret of messengers lies in the number of users, this service is actively used by millions of users worldwide every day. In terms of popularity among smartphone owners, they are in third place after Facebook and games. According to statista.com, there is a steady increase in the number of WhatsApp users, at the moment the app has about 700 million active users.
According to forecasts of specialists, the messenger's revenue by 2018 must cross the millionth line.
Here's how WhatsApp earns: in the first year, the application is free and then a subscription is required and the user pays $ 1 for each subsequent year.
Analysts say that this strategy of WhatsApp significantly limits the opportunities for earning. During a joint conference with Facebook, the creator of the application, Jan Koum, said that monetization is a matter of the future and is not placed in the priority tasks. He explained how WhatsApp earns: the company is focused on increasing the number of consumers and maximizing the subscriber base, stable payment mechanisms will be introduced later.
Application without advertising, games and hidden fees
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Rapid growth in the audience of messenger users is due to the following reasons: Free use; Ability to cancel multiple accounts by using a regular phone number; Access to a variety of useful functions; Lack of standard advertising model and targeting. The founder of WhatsApp is strongly opposed to advertising, games and various tricks, so many people want to understand the secret of how does WhatsApp make money if it's free.
The method of monetization is extremely simple: the emphasis is on the fact that for the first free year of communication users will get attached to the messenger and will not part with it in the future, therefore they will continue to constantly pay the subscription to always be in touch with friends. The company wants to make the world more communicative and also open, and also connect billions of people. The future of this messenger is in its multi-functionality, as it gradually it becomes an analog of the Internet portals and acts as an indispensable intermediary.
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