If you own a smartphone, you must be aware of the app called Whatsapp – the one that is the most used mobile messenger application worldwide. With 1.5B active users, WhatsApp has spread all across the globe like fire. The application has a presence in 180 out of 193 countries in the world, which is the biggest share among all, messaging and social networks. Which says WhatsApp business model and revenue model are worth looking into.
The chat app was launched a decade ago in 2009, after the founders, Jan Koum and Brain Acton left their job at Yahoo. The duo left their jobs in 2007 to seek other ventures. Brian Acton also applied for a job at Facebook in 2009, around when he was also creating WhatsApp. But, his job request was rejected.
Just after 5 years, in the year 2014, Facebook purchased WhatsApp for $19B. Yes, that’s right. The organization was worth almost $20B only five years after its inception. It’s a galactic figure. However, that didn’t happen overnight. Let’s Take a look at the company’s user growth in the initial years.
For those of you who are planning to develop a messenger application like Whatsapp, knowing the stories of those who have succeeded before you is a smart idea. You can learn a lot from the WhatsApp revenue model and, replicate their business model or features to model your very own application the same way.
Founders: Jan Koum, Brian Acton
Parent Company: Facebook
Founded in: 2009
Headquarters: Menlo Park, California, United States
WhatsApp is a savvy alternative to SMS messages, which are provided by mobile carrier networks. The reason behind why WhatsApp works so well is because it’s safe, private and reliable. Users don’t need to stress over forgetting a password, username, or being blocked out of the application.
Here is how this most popular chat app works:
Users need to register in-app with their Phone Number.
After registration, Whatsapp provides users the ability to start a conversation with people that are added in the user’s contact list and are using WhatsApp. The feature is called Instant Messaging.
WhatsApp also provides users the ability to make phone calls. It facilitates phone calls using VoIP i.e. voice over Internet protocol.
Along with voice calls, WhatsApp also offers video chat options with other WhatsApp users. This is also free-of-cost, worldwide. It functions similarly to VoIP using the Internet via cellular data or WiFi.
Using WhatsApp, users can also communicate in groups. Along with text messages, users can also share images, and videos with each other in group chats.
The app also offers group calls – they released a group video chat feature for Android and iOS users in the year 2018.
Users can share their location with friends in real-time. The feature is called “Live Location sharing”.
The app uses cloud service synchronization to save the user’s data.
It also provides multimedia file transmission as the main feature. That means various types of data and files can be sent through the app.
The settings part of WhatsApp contains account settings, privacy, and profile settings.
Whatsapp got its initial round of funding of $250k by five ex-Yahoo companions who were given the status of co-founders later. The 2nd and 3rd round of funding was carried by Sequoia Capital which has contributed an aggregate amount of $60M in Whatsapp Inc. This was the only investment and source of income for WhatsApp’s employees.
Then after two long years of being charmed by Facebook’s CEO, Whatsapp was acquired by Facebook in 2014 for $19B, and every one of the employees of WhatsApp was put to Facebook’s payrolls including Koum, who is currently a part of Facebook’s board.
Presently, Facebook not just utilizes the app as a user data generation asset but also has introduced some strategic plans for earning money. The company launched a Whatsapp Business application which allows users to create business profiles and become a verified business on WhatsApp.
The company also expanded its business functionality by launching its first revenue generation product – Whatsapp Business API. This new addition lets businesses use WhatsApp for Business APIs with their frameworks to contact customers through push notifications and answer their inquiries automatically. That was all about “How Does Whatsapp Make Money?”
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