Have you ever heard about the saying "If you are not paying for the product, then you are the product"? With this, I begin to imagine how companies like Facebook and WhatsApp make money.. Facebook could tie its revenue to adverts, since the company isn't selling shares daily to keep the company day to day activity going.
INTRODUCTION
A lot of people know that Facebook actually bought WhatsApp and were not the company that founded it. I could call it the power of having too much money. WhatsApp was founded in 2009 after the BBM (users who used BlackBerry would comprehend). The iPhone had just been launched and people wanted to communicate just the way the BlackBerry users were communicating with the Messanger. WhatsApp was launched by Brian Acton and Jan Koum as a way to update status but as time goes on, It became a private messaging application. While Traditional messaging was expensive, WhatsApp did the trick of making it free and fast.
There are a few ways to make money as a company with applications. It is either customer pay for premium services, in-app purchases, adds, or (using customers data). WhatsApp in its initial stand didn't make any revenue as the founders didn't like in-app purchases, advertising, and using customers data, meaning that the project wasn't generating any revenue but rather using its seed capital.
As time goes on, WhatsApp needed funds, so they had to introduce a usage fee of $1 for their users. Impressive i get but while this was so in some countries, some countries were still using it free for about a year, others for longer period. The fee was not really a mandatory thing. the $1 wasn't big enough to make WhatsApp profitable
WhatsApp Sells
First off, WhatsApp started receiving money from investors as they were reaching about 1 billion people and so investors got interested. Even tough it wasn't profitable, they believed in it and just wanted to invest. As time goes on, investors wanted to see if the company was bringing in money and so WhatsApp had to sell the company to be profitable. Interesting enough, in 2014, they found a buyer (Facebook) who bought the company for $19 Billion. Although WhatsApp wasn't making up to $1 Billion, it had over 1 billion users.
In 2016, Facebook stopped the $1 fee for WhatsApp making the messaging App completely free. Facebook uses their Users' data to generate traffic for an advert which will be targetted. Although it has also been in several scandals, including the Cambridge Analytica for selling Data of users, of which Zuckerberg has continuously say he is sorry and it was a mistake. My question is How Do WhatsApp Make Money
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