Have you ever wondered how does WhatsApp earn money without ads? Get to know how does WhatsApp earn profit and the secret behind it and why is WhatsApp against advertising.
The largest chat application in the world, Whatsapp was bought over by Facebook for a whooping $19 Billion that instantly made their founders Brian Acton and Jan Koum billionaires. Brian Acton is known for his stand against advertising. He said back then:
People don’t wake up first thing in the morning to see Ads. People aren’t looking for Ads to see.
Brian has a note on his desk, which reads: “No Ads, No Games and No Gimmicks”
His hatred for advertising helped in building a sticky product that had all the features the users wanted and nothing more. He believed that the connection with the customers and the product will be affected when advertising is in the picture because all effort will be focused on getting better results for the advertiser and the customer’s experience takes a back seat. One of the clauses mentioned in the Facebook acquisition of Whatsapp was, Facebook wouldn’t make Whatsapp an advertising platform. There were stories that Mark pursued Brian relentlessly and had countless dinners with him and convinced him that Whatsapp would never have ads on it’s platform.
How does WhatsApp earn profit?
One question that plagues a lot of people is how does Whatsapp make money?
A lot of people aren’t aware of this, but Whatsapp’s team is not in the thousands, is not even in the hundreds. Whatsapp’s entire team consists of only 50 people. They pour in all their efforts to managing the databases, speeding of requests. They’ve built start of the art technology that can easily handle over 50 billion messages a day. So why is this important?
Their superior technology handling enables them to have a very small team. They do not have a marketing or advertising team because of their hatred for advertising. They do not have a sales team. Their team consists mostly of developers and every once in a while they appoint consultants for some PR help.
So when the team is just 50 in number, it doesn’t take a lot of money to keep the company surviving. Whatsapp actually charges users in certain sections of the world and that nets them million’s of dollars a year. But Whatsapp’s competitors charge their users for emoticons, they run ads which net them much more money than Whatsapp. It is estimated that if Whatsapp follows it’s competitor’s policy of monetization then they would easily rake in $2 Billion dollars a year.
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So why would Mark Zuckerberg pay $19 Billion for an app that isn’t going to make him a lot of money. The answer is people aren’t shown ads, a collection of people are data. The data of millions of users across the world are processed, collated, segmented and sold and used as information for Facebook Advertising. Facebook’s advertising is so specific in terms of the kind of people they are reaching out to. This kind of data is available on Whatsapp and is used extensively in Facebook. Whatsapp is used as an information collection agency and Facebook benefits from this.