Facebook (FB) made a huge investment to make WhatsApp part of its corporate family five years ago, buying WhatsApp for $19 billion. The WhatsApp purchase stands as Facebook’s most expensive acquisition to date. However, Facebook has yet to recoup its big investment in WhatsApp.
Before Facebook bought it, WhatsApp made money from charging users a small fee of $1 per year. As a result, WhatsApp could pull in $450 million a year in revenue from its 450 million users at that time. However, WhatsApp stopped charging the annual fee shortly after joining Facebook, leaving it without a clear revenue source.
WhatsApp makes money in India
Last year, WhatsApp introduced a business app, taking a step toward making money from its community of business users. WhatsApp’s business app offers premium business chat tools that attract a fee, thereby generating revenue for the platform. WhatsApp business app has attracted more than 5.0 million business users globally and 1.0 million business users in India.
Facebook about to begin serious WhatsApp monetization
WhatsApp’s first revenue and profit in India should come as good news for FB investors, who have long waited to see the fruits of its investment. WhatsApp’s financials in India are a positive start to Facebook’s efforts to monetize the platform. The rise of online shopping is driving uptake of mobile payment services in India. Facebook has spotted the opportunity and plans to soon launch a mobile payment service linked to WhatsApp in the country.
Moreover, Facebook wants to open the WhatsApp platform to advertisers. It’s set to start running ads on WhatsApp from next year. WhatsApp’s massive global audience of over 1.5 billion users shows it could be a strong contender in the digital advertising market.