How does WhatsApp make money?

By using your conversation metadata, to sell you better ads or sell the data to other advertisers.

>b-b-but it's encrypted!

Doesn't matter. They know who you are, because your account is linked to your FB account (either directly or just by matching your phone number). Then you send them your full contact list when you install the app (have you tried using WhatsApp without the Contacts permission?). Then they can see metadata about who you talk to and how often.

Pulling up those advertising profiles, they can add to your profile: for example, if a good portion of the contacts you talk to daily have "interested in cars"/"republican"/"male 25-29" in their profile, there's a good chance you fall into those categories too.

From Businesses - small and large. Using the WhatsApp API. That alone is a multi-billion dollar opportunity.

For example, people like my startup (https://www.zoko.io) provides software that enable folks to run any business on (only) WhatsApp.

WhatsApp would make money by - charging for certain types of messages sent via the API (already doing it) - from ads on the WhatsApp, Facebook and Instagram Platform that click directly to WhatsApp.(already doing it) - enabling payments via WhatsApp Pay and then take a cut of the payments. (coming soon)

I am amazed by the things that my customers do with WhatsApp - like Fintech companies who provide loans to Uber drivers via WhatsApp, OR Fertility Clinics that dole out professional advice on how to make babies, via WhatsApp.

WhatsApp is just getting started! Remember when the internet was free, Google showed up and became a toll collector for doing anything on the internet? Just like that, WhatsApp is the internet of the #nextbillion people. WhatsApp, if they play their cards right, could become the "toll collector of the internet for the #nextbillion". I am literally all in, that it will.

Whatsapp didn't have end-to-end encryption until April 2016.

The app used to cost €0.89 per year (which I guess was $1 at the time).

I'd be surprised if Facebook had bought WhatsApp looking for revenue. Even if the service is operating at a loss, it's still providing FB the messages (at the very least, their metadata) and personal data of two billion people.

I suppose that through their Business API, but given the amount facebook paid for them and the scale at which they operate, I don't think that would be enough to cover their costs.

My speculation - Facebook might mine the conversation data & sell that to third party/show targeted ads on Facebook.

By being part of Facebook, gathering data about whom you communicate with (that works even with end-to-end encryption), combining this with the profile Facebook has about you, and selling this data to third parties.

By using WhatsApp, you become their product, and they are making money with you.

They announced in-app purchases a few hours ago: https://www.reuters.com/article/facebook-whatsapp-ecommerce-...

Facebook would like to see money from WhatsApp but it was far more important to them to block off a potential competitor.

WhatsApp could have provided services like Facebook or Instagram but cost a small amount of money each year. Maybe it would be per-user or maybe it would be a sponsorship, like what Discord is doing. Sponsor the local neighborhood group for $25/year, your high school class forum for $100/year (so you can show everybody "you made it big").

The key to doing something like that is network effects, which WhatsApp had in spades.

Probably it's inevitable that they would have descended into advertising and tailoring the site for advertisers instead of users.

At the moment Zero. WhatsApp on its own doesn't make any money at all. Apart from some meta data about you and your contact.

But WhatsApp on itself doesn't cost much to run. They had 1B user and was running it on 50 Big FreeBSD Box. With a tiny engineering team. And that was with Hardware and Software from 6 - 7 years ago. Modern Hardware with all the BEAM VM improvement would made it even lower. ( Kind of Amazing if you think about it )

WhatsApp is a loss leader that allows Facebook to infer the social graphs of people through their contacts list (even those that are not Facebook users) which they can then monetize, either directly (if they are Facebook users, by showing better-targeted ads) or indirectly (by using non-Facebook users as "gateways" to infer relationships between existing Facebook users which would then be used to better target ads).

The last thing I read (a few months ago) was that they were planning on introducing ads. But it seems it hasn't happened yet.

I don't think they do make any money actually. There's still no ads in the app which caused a huge argument a while ago, and the app is free.

I guess indirectly maybe they acquired some more Facebook users although I suppose most people who had whatsapp also already have a FB account.

My guess is that they always wanted to turn it into the western wechat.

I think the business model is to get other businesses using their WhatsApp for Business services, and then cross-sell them to the FB ad platform.

There is this THEORY (!) WhatApp is actually cross-financed by governments, so it can stay online as the biggest communication surveillance "device" in human history. We are talking about a 100% uptime free service that literally has become the center of human remote communication in major parts of the world.

Encryption is a shady topic, and there is a realistic chance there is a backdoor in the methods WhatApp uses to encrypt content, history has shown this is realistic.

Governments have done way worse things.

Maybe they’ll do payments at some point