History of WhatsApp and its business model
Article # 89
Dated: 19th January 2022
I am sure almost every one of you guys must have heard about WhatsApp. Because it is the most popular messaging application in over 100 countries, 2 billion users are actively using and it is downloaded more than 5 billion times. 7.7 billion people are living on planet earth so it means more than 25 % human population is using WhatsApp.
WhatsApp was founded by two ex-yahoo employees, Jan Koum and Brian Acton in 2009. But they left yahoo and tried to join Facebook but both got rejected. Brian Acton even tweeted in 2009 after facebook turned him down.
The first design of WhatsApp was only to inform others about their status as the name shows "What's up" and it was not used as a messaging app. But then they thought they should make a free messaging service. This idea was a blockbuster because there was only one free messaging app in 2009 and that application was blackberry's Blackberry messenger but the problem with it was you had to have a blackberry phone for using BBM. So WhatsApp filled that gap for other company phone users.
WhatsApp got popular within a few days and the team didn't feel any need to run marketing campaigns or ads because people liked it. Because liked it so much that they told their friends and this way WhatsApp saw organic growth. The other reason behind its growth was that telecommunication companies charged a lot of money for messages and call rates were expensive in 2009 whereas WhatsApp messaging was completely free.
Investments started but they needed to provide for their teams that's why they started charging $0.99 per year from their users to provide salaries to their team. But the growth didn't stop here because they were adding new features to the application like they added a facility of sending pictures. The founders were clear about one thing. They wanted to provide a useful and free application to their users without frustrating them with ads. They cared about the data privacy of their users.
But then Facebook founder Mark Zuckerberg finalized the deal of buying WhatsApp for $19 Billion in 2014 because it was the biggest competitor for Facebook messenger. Mark Zuckerberg is money hungry as you all may know the controversy of selling their Facebook users' data to companies. He launched the WhatsApp business which gives the facility of linking Facebook profiles and other links to the business's profile. This is the way they created a link between WhatsApp and Facebook which makes them promote facebook.
Whatsapp business is free but WhatsApp is earning through their API. As they are selling their API to businesses. If a business wants to interact with their customers and reply to them on Whatsapp. They can do it for free only within 24 hours but they will be charged if they respond later than 24 hours. The charges vary from place to place.
Some big businesses are currently availing the services of WhatsApp buisness. Companies like booking.com, Singapore airlines, uber, NetFlix, etc have millions of customers are using WhatsApp business. Facebook didn't stop here as they are also planning to launch a p2p payment service on WhatsApp by the name of WhatsApp pay. WhatsApp pay services would be free for normal users but they will charge businesses for payment transactions. They are also planning on hosting promotional ads on WhatsApp and they will host them in status sections.
Also, there are some controversies around the WhatsApp user's data as many people accuse Mark Zuckerberg is selling the data of their users to the companies even though it's not confirmed yet.
I am using WhatsApp because our company officials use it for official communication. Even though I dont recommend using it due to privacy and data theft issues. If you are worried about your data privacy then Signal is the best application for you as it is founded by Brian Acton who is the founder of WhatsApp. Signal app is a far better app than WhatsApp in terms of data protection and privacy.
