WhatsApp Monetization: Where Facebook Sees the Money

Facebook (FB) spent $19 billion to purchase mobile messaging app WhatsApp back in 2014. At that time, WhatsApp had 450 million monthly active users. Today, it boasts over 1.5 billion. While WhatsApp’s user base has expanded significantly, Facebook is only beginning to map out its monetization.

In that journey to monetizing WhatsApp, Facebook introduced a feature that will make WhatsApp a more valuable marketing tool for small businesses last week. The catalog feature lets businesses set up storefronts to easily showcase their products and share production descriptions, pricing, and other details with customers on WhatsApp. Previously, businesses had to send messages and photos to share product information with prospective WhatsApp customers. The feature has rolled out in the US, the UK, Germany, Brazil, Mexico, Indonesia, and India.

Facebook plans to open a WhatsApp platform to advertisers next year. WhatsApp’s massive audience of over 1.5 billion monthly users and 500 million daily users undoubtedly makes it an attractive marketing platform. And there are more than 5.0 million small businesses on WhatsApp that could become advertisers. Bringing advertising to WhatsApp would also complement FB’s namesake platform and Instagram in this market. In comparison, Twitter (TWTR), which recently reported having 145 million daily users, made $2.6 million in ad sales last year.

Mobile payment is another market Facebook could focus on for monetization. WhatsApp has created a mobile payment service expected to launch in India anytime. Earlier this year, Facebook picked London as WhatsApp’s payment headquarters.

Last year, WhatsApp introduced pay-to-use communication tools aimed at allowing businesses to provide customer support. The global customer service industry, worth $350 billion per year, offers a huge revenue opportunity for WhatsApp.