How does WhatsApp make money?

WhatsApp is one of the biggest messaging platforms. It has more than two billion users in 180 countries around the globe. The Meta-owned company is known for its subscription and advertisement-free model. WhatsApp was purchased by Meta, formerly Facebook, for $19 billion in 2014.

Before Meta's purchase, WhatsApp was subscription-based and generated approximately $700 million annually. But Meta felt that the subscription-based model would not be perfect for a long-term strategy, and in January 2016, it decided to make it free for all users worldwide. The company had proposed an advertised-based revenue model, although it is still functioning on a non-advertisement model.

Jan Koum and Brian Acton in 2009 founded WhatsApp. They aimed to make WhatsApp an alternative to the costly sms. Their initial revenue model was subscription based. The users had to pay $1 for a year at the time of download, while in some countries, it was free for the first year and charged $1 for the renewal in the second year.

At its peak, during the subscription-based model, WhatsApp had approximately 700 million users worldwide. In 2016, in Meta's ownership, WhatsApp subscription-based model was ended in favour of the free-to-use model. In 2018, Jan Koum, the co-founder of Whats App and a director of Facebook Inc. at the time, left the company over disagreements on the proposed advertisement model and user data safety.

Currently, there are no advertisements on WhatsApp, but the company plans to introduce a limited advertisement model. Earlier this year, in a statement, the company said, "Starting this year, we will test tools that allow you to use WhatsApp to communicate with businesses and organisations that you want to hear from." The limited advertisement model aims at the users communicating directly with their airlines, banks, etc. In many countries, WhatsApp has introduced WhatsApp pay, which allows users to send money directly to the bank accounts of other WhatsApp users and non-WhatsApp users. The financial statements of What App are not public, but according to Forbes' estimates, its revenue stands at approximately $27 billion in Q1 of 2022.