uploads/2016/02/MAUs.png

Facebook to Monetize Messaging App: Will It Nail the B2C Market?

By

Updated

Businesses to interact with users

Facebook (FB) announced in its blog post that its WhatsApp Messaging app has crossed 1 billion users and has found a new way to monetize its users. Until now, Facebook’s WhatsApp has been running on a subscription model with an annual subscription fee of $0.99. WhatsApp founder Jan Koum announced that the company is dropping its subscription model. Instead, the company will adopt a B2C (business-to-consumer) model to charge businesses directly.

Article continues below advertisement

According to the new business model, WhatsApp will explore new ways businesses can use the service to connect users. The new feature will allow users to communicate with businesses and organizations with whom they want to stay in touch. For instance, a user can ask a bank for a transaction status or an airline about a delayed flight, things that currently require users to call or send an SMS (Short Message Service).

However, the company avoids using advertisements and third-party tools to monetize its messaging app, which could be annoying for a user who is communicating with other members. From the graph below, we can see that WhatsApp is outperforming WeChat as well as Twitter in terms of MAUs (monthly active users).

Article continues below advertisement

The B2C market

By using the B2C model, WhatsApp can serve its users as a center of contact that will engage more users to use its messaging service. At the same time, it offers the opportunity to connect with new businesses. In fact, Facebook’s stand-alone Facebook Messenger is already offering users the option to chat with businesses and allowing users to hail a ride through Uber. Koum has claimed that the B2C model will be designed for large corporate customers such as Bank of America (BAC), Wells Fargo (WFC), and JPMorgan Chase (JPM).

There are several communication tools available in the B2C market. Slack allows businesses to integrate its CRM (customer relationship management) apps to interact with customers. Twitter (TWTR) has also developed CRM tools to link customers with businesses through direct messaging. WeChat and LINE offer the same service to their users in China (FXI).

Advertisement

More From Market Realist