WhatsApp, one of the world’s leading messaging apps with nearly three billion users as of 2024, maintains its free service model by monetizing through corporate clients rather than charging individual users. Owned by Meta, which also owns Facebook and Instagram, WhatsApp leverages its extensive user base to provide valuable services to businesses.
The primary revenue stream for WhatsApp comes from its business-oriented services. Companies can create channels on WhatsApp to send messages to subscribers, and they pay a premium for the ability to interact with individual users through the app. These interactions can be both conversational and transactional. For instance, in Bangalore, India, users can buy bus tickets and choose their seats via WhatsApp. This seamless integration of services into chat threads allows businesses and customers to conduct transactions without leaving the conversation, enhancing user convenience.
Additionally, businesses can pay for links that direct users from online ads to WhatsApp chats, facilitating direct and personal customer interactions. According to Nikila Srinivasan, Meta’s vice president of business messaging, this feature alone is worth “several billions of dollars” to the company.
Moreover, WhatsApp, like many other messaging platforms, benefits from advertising. Matthew Hodgson, co-founder of Element, notes that these apps often monitor user activities and interactions to target them with relevant advertisements. Even with encryption and anonymity, the data gathered about user behavior is valuable for ad targeting. This business model aligns with the adage, “If you the user aren’t paying, then the chances are that you are the product.”
WhatsApp generates revenue by providing premium services to businesses, facilitating direct customer interactions, and leveraging user data for targeted advertising, all while maintaining its free service model for individual users.
