What Is My Daily Dose of Messaging Like?
Over twenty hours, I have sent more than one hundred WhatsApp messages. None were exciting; I planned with my family, spoke with colleagues about work projects, and shared news and rumors with friends. I should start playing better. Still, even my most ordinary conversations were encrypted by default, and WhatsApp’s robust computer servers were used in several data centers worldwide.
It is not a low-cost operation. Still, the folks I spoke with yesterday and I have not given any money to use the program. With almost three billion users globally, one wonders how WhatsApp—often called “zap zap” in Brazil—makes money.
How Does Meta Influence WhatsApp's Revenue Model?
However, WhatsApp benefits from a large parent corporation behind it: Meta, which also holds Facebook and Instagram. Personal, individual WhatsApp accounts like mine are free since WhatsApp makes money from business clients who want to interact with users like me.
Since last year, companies have been able to create free channels on WhatsApp, enabling them to message subscribers. However, businesses pay a premium for access to conversational and transactional engagements with particular consumers via the app.
What Business Innovations Are Happening in the App?
Although the UK market is still expanding in this regard, users in Indian places such as Bangalore may purchase bus tickets and even select their seats via WhatsApp. “If we get all of this right, we aim for the consumer and the company table to complete tasks in a chat thread immediately. You should be able to purchase a ticket, start a return, or pay if you like without ever leaving your chat thread. You can then resume all of the other discussions in your life.
Businesses can also pay for a link that connects to a personal account and begins a new WhatsApp chat straight from an online advertisement on Facebook or Instagram. This capability alone is worth “several billions of dollars” for the IT behemoth.
What Are the Alternative Messaging Models in Use?
Other messaging apps have chosen different business models. For example, Signal runs as a non-profit company and is well-known for its robust message security systems that have established industry standards. Signal runs on contributions, unlike Telegram, which depends on investors. One of WhatsApp’s co-founders gave it a $50 million (ÂŁ38 million boost in 2018). “We rely on a lot of little contributions from people who care about Signal and aim to move as near as possible to fully supported by small donors.”
Another well-known messaging software used mainly by young gamers is Discord. It uses a freemium model—free registration with additional features, including game access and Cost. For $9.99 a month, it also offers a subscription membership called Nitro, which gives access to premium video streaming and personalized emojis.
The business behind Snapchat and Snap mixes numerous revenue sources. It runs commercials, has 11 million paying members as of August 2024, and markets Snapchat Spectacles—augmentative reality eyewear. Between 2016 and 2023, it made almost $300 million from interest alone. Still, its primary source of income is advertising, which takes in more than $4 billion yearly.
How Does Element Fit Into the Messaging Landscape?
Element, with offices in the UK, charges governments and big companies to use its encrypted messaging technology. Its clients run its technology on their servers but use it. Reaching “double-digit million revenue,” this 10-year-old company is “almost profitable.”
Advertising is still the most often used business model for chat apps. “Many messes, aging platforms sell adverts by monitoring what people do, who they and talk to, and then targeting them with the best adverts.”
Are Users the Product in This Messaging Economy?
The basic theory is that applications don’t need to access the content of messages being sent to learn much about their users, even with encryption and anonymity. They can then use that information to offer focused advertising. “It’s the old story—if you, the user, aren’t paying, then the chances are you are the product.”
In essence, WhatsApp’s business model takes advantage of the contacts between corporate clients and personal users while offering a valuable service to its consumers without directly charging them. This intricate network of message dynamics exposes the underlying economics of one of the most downloaded applications worldwide.
