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Meta’s WhatsApp Plans To Hook The Big Fishes In The Technology Sea For Smooth Sailing!

By TD NewsDesk

TD NewsDesk

Updated on Tue, Sep 5, 2023

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Last seen…. Blue ticks…. End-to-end encryption…. Share my stories with close friends… In the Pre-WhatsApp era, who knew these terminologies would become a part of our daily lives? In this ever-evolving world of DMs (direct messages), WhatsApp reigns supreme as the undisputed champion of connectivity.

Well, it all began nearly a decade ago when Mark Zuckerberg sent shockwaves through the tech world by announcing Facebook's jaw-dropping $19 billion acquisition of WhatsApp, a relatively small messaging app. Fast forward to today, WhatsApp boasts over 2 billion users, a significant increase from the 450 million it had at the time of the acquisition. However, what's intriguing is that WhatsApp remains a relatively modest source of revenue for Facebook's parent company, Meta.

A recent news highlighted how the popular global app, WhatsApp, is vouching for the big businesses to capitalize on the app's popularity among users.

Talking about WhatsApp businesses, the unit's Product Director, Alice Newton Rex said, "It's been clear for many years that people are trying to connect with businesses on WhatsApp." He continues, "If you go to India or Brazil and look around, you'll see WhatsApp numbers posted up in shop windows everywhere. This is how businesses want to engage with their customers."

TechDogs-"A Screengrab Of The Unit's Product Director, Alice Newton Rex."
Wow! That sounds cool, how is WhatsApp planning to incentivize businesses?
  • According to a report, unlike Instagram, a platform Facebook acquired in 2012 for a more manageable $1 billion, WhatsApp refrains from displaying ads—a stark contrast to Zuckerberg's primary source of income. Furthermore, WhatsApp seems to exist in its technological realm, distinct from Meta's ambitious ventures like the metaverse and its TikTok competitor, Reels.
  • The same report says that to convert its massive user base into a substantial revenue contributor, WhatsApp must persuade large businesses worldwide to make it their primary channel for customer communication. Companies currently pay fees ranging from half a cent to 15 cents per conversation, depending on the nature of the chat and the country it occurs in.
  • One of WhatsApp's unique selling points is its robust encryption technology, making it especially appealing in countries with oppressive governments. In contrast, consumers in the U.S. typically gravitate toward Apple's iMessage, Facebook's direct messages and formerly Twitter's messaging service, X.
  • WhatsApp's marketing strategy in the U.S. highlights its encryption features, capitalizing on users' growing concerns about data privacy— a notable departure from Meta's privacy blunders, including the infamous Cambridge Analytica scandal.
  • Meta's growing investment in generative artificial intelligence (AI) also holds promise for WhatsApp's future. Zuckerberg recently announced plans to integrate advanced chatbots into WhatsApp and other messaging platforms. This push into generative AI could pave the way for many business applications, offering real-time, convenient customer service and seamless transactions.

As the saying goes, with great plans come great challenges (yeah, we made that up but makes sense, right?). A few challenges also await Meta’s WhatsApp. Let's look at what those challenges are:
  • WhatsApp's value within the Meta ecosystem has remained a subject of speculation for analysts and investors. The company keeps its financials closely guarded, leaving experts to estimate its revenue at anywhere between $500 million to $1 billion—a fraction of Meta's overall earnings. In stark contrast, Instagram is projected to generate a whopping $40 billion in revenue this year alone.
  • WhatsApp's revenue challenge can be traced back to its co-founders, Jan Koum and Brian Acton, who openly criticized the advertising industry in a 2012 blog post. Their stance against intrusive advertising aligns with WhatsApp's ad-free model but also underscores the financial puzzle it presents for Meta. 
  • Highlighting the revenue issue, Debra Aho Williamson, an analyst at Insider Intelligence, chuckled, "Facebook bought WhatsApp nearly nine years ago — It's a long time to have an app that has enormous usage, but where's the revenue?" He further continues, "We've kind of been watching it for years and years going, 'OK, guys.'"

Are you looking forward to seeing WhatsApp unlock its full potential as it transforms into a business-to-consumer platform? Will WhatsApp be able to succeed in its plan to reel in big businesses?

Drop your thoughts in the comments section below!

First published on Tue, Sep 5, 2023

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