Whatsapp is making big plans to be more than just a messaging service - will this change the face of the app as we know it?
WhatsApp is the simple, no fuss messaging service we all know and love. For just $0.99, we can send unlimited messages, photos and videos to our friends and families around the world – no wonder the app has 900 million users, nearly the entire population of Europe.
The $0.99 fee was introduced after around 300 million users had already downloaded the app, however, this still allowed for the generation of revenue. With so many users, even such a small fee could generate millions. But the profit making has a limit; even if the entire population was to buy WhatsApp at a price of $0.99, the total value of the company would be around $7.4 billion, which is undoubtedly a lot of money.
$7.4 billion pales in comparison to $19 billion though, which is how much Facebook creator Mark Zuckerberg paid for the app two years ago, leading to some very confused people. One of the reasons cited for Zuckerberg’s purchase is that WhatsApp was, and still is, one of Facebook messenger’s biggest competitors, but this still wouldn’t explain why he would pay so much. The fact that Zuckerberg would pay such a price for a company that seems unlikely to ever make him a return on the money posed the question: what does he plan to do with it?
To make matters even more confusing, last week WhatsApp’s founder, Jan Koum, announced that the company would abandon the $0.99 fee, as it was thought to discourage users, making them turn to alternative messaging apps. So if the app isn’t making any money at all, has Zuckerberg just wasted $19bn of hard earned cash?
Well, it turns out Zuckerberg is a man with a plan. The app will not be introducing third party ads to make money, as many people believed, but will instead allow businesses and organisations to communicate with you via WhatsApp, and charging them for the privilege. As stated on the WhatsApp blog, ‘That could mean communicating with your bank about whether a recent transaction was fraudulent, or with an airline about a delayed flight’, essentially making WhatsApp a platform for other services, an incredibly lucrative idea.
Becoming a platform could be an incredibly successful move for the company, and has been demonstrated by Chinese app WeChat. Currently the third most popular messaging app in the world, WeChat has also developed a City Services feature, which allows users services such as booking doctor appointments, paying electricity fees and booking transportation through the app itself.
Now that Facebook owns WhatsApp, there are also reportedly rumours that WhatsApp users accounts may soon be integrated with their Facebook accounts. Although the benefits of this for users are currently largely unknown, it has been promised to ‘improve Facebook experiences’.
With a continually growing user base expected to reach 2 billion by the end of the decade, and with double the amount of WhatsApp messages being sent than text messages, the app shows no sign of slowing down. Certainly, for the next few years the company will continue to make money, but it is uncertain how well users will take to the new additions.
There is the argument that in fact users are progressively wanting apps to do less, rather than more, allowing for one app per function. If WhatsApp becomes an all encompassing service, rather than just a messaging device, users may switch to competitors like Viber. Certainly, if businesses start bombarding users with spam and junk mail, it’s unlikely they’ll be happy. For now, we’ll have to just wait and see.