How does whatsapp make money

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    How does whatsapp make money


    Answering how does Whatsapp make money, involves millions and billions so lets brush up our elementary mathematics.

    According to US and Indian Number system

    1 Thousand1 X 1031 Hazaar> Vatican city
    1 Million1 X 10610 Lakhs> Cyprus
    1 Billion1 X 109100 Crore> Philippines
    1/7 th Worlds population

    Whenever you read millions, billions, lakhs and crores, your mind automatically relate it with money because that is how we always deal with such big numbers. Perhaps the last column might seem odd to lot of you but that is what internet/mobile apps is all about. Its about people, its about connecting them, its about you and me.

    99% of you will never understand when I will say "Whatsapp was never made to make money" because we all believe that nobody works for free. I know 1% of people on this planet still work from their heart and it is always these 1 % who have changed the world ! Jan Koum, creator of Whatsapp is just one such person. A guy who has seen rough times, who has worked years thinking "Am I working or doing something for money ?", a guy who just quit and traveled an year in South Africa to find a purpose of life and finally a guy who created himself by this wonderful Mobile app which we use each day "WHATSAPP" !

    Whatsapp creator Jan Koum and Brian Acton both worked in Yahoo spending combined 20 years working hard to sell ads and they despised it. so when they decided that they will start something new, they alwayswanted to make something that wasn't just another ad clearinghouse. We wanted to spend our time building a service people wanted to use because it worked and saved them money and made their lives better in a small way. We knew that we could charge people directly if we could do all those things. We knew we could do what most people aim to do every day: avoid ads.This states very clearly how Whatsapp makes money !

    In 2009 Whatsapp started with iPhone the most popular smart phone then and by late 2011 were available for
    1. iPhone
    2. Android
    3. BlackBerry
    4. Nokia Symbian
    5. Nokia S40
    6. Windows Phone
    By early 2012, almost 2 years later millions were using Whatsapp and in a single day billion message was sent using Whatsapp. You need to understand these figures are overwhelming but also expensive !

    While whatsapp has only 1 website to communicate with its users and keep them updated with changes, hoax and their mission, that website does not cost them more than few dollars. The server to process your message and information however does cost a lot, and so does the increasing team members which by now is more than 50 engineers. Anyways coming back to how does whatsapp make money.

    A lot of people think that Whatsapp is free, but it is not ! Whatsapp is a subscription based app. Initially it charged one time 0.99 USD to iPhone users and for other users they gave it for free first year, after which they needed to pay 0.99 USD each year. However on 07th August 2013 Whatsapp talked about "Whatsapp business model to earn money" and stated we’ve simplified our business model so that all users on all platforms will enjoy their first year of WhatsApp service for free, and only pay $.99 per year after that. We feel that this model will allow us to become the communications service of the 21st century, and provide you the best way to stay in touch with your friends and family with no ads getting in the way.
    When you intend to connect the whole world and become the communications service of the 21st century you need money for that. So how much is Whatsapp making ? Similar to Craigslist (How does Craigslist make money), Whatsapp team of engineers are more focused in making and improving Whatsapp app than boasting about how much Whatsapp earns or which car they drive ! But a simple calculation can be done with elementary maths above and the fact that they have half billion active users by April 2014.

    Lets assume that 80% of this user-base will actually pay and trust me I am not overly optimistic. So in Apr 2015 Whatsapp will make money equal to
    Expected Whatsapp earning in 2015

    0.80 X 0.99 X 0.5 X 109 = 0.396 X 109 USD
    or almost 0.4 Billion USD
    or almost 2350 Crore INR
    Remember that whatsapp is making this amount without any support of advertisement and that it is growing at a humongous rate as thousands of cheap Android phone users get added each day to Whatsapp ever increasing user-base. Also remember that Whatsapp started with only Whatsapp status update service to keep everyone informed that your "battery about to die" or "you are in a meeting".
    Improved to messaging service cheaper than SMS !
    Improved to media sharing service cheaper than MMS !
    Improved to group chat and location sharing and lot more !
    Whatsapp is perhaps the only app which understood the limitation of mobile data usage unlike other apps which exhaust your data limit. Whatsapp has future plans to integrate voice calls too but the data usage presently is more expensive than direct call unless its international calls. So beware Skype, Viber for more Whatsapp updates. Now do you see why Facebook acquired Whatsapp !

    Whatsapp success is a learning for all, that "how can we help" is more important than "how can we sell". I will end this topic here with a view that you will understand that each business is more about solving a problem than about selling something and how each dollar counts to make billions. So in your next venture do not start with how to make money online , think how your service can help others and understand how does whatsapp make money ! Best of luck for your venture .  How does whatsapp make money

    Rishi Kashyap | | EDIT | REPLY
    • X

      Very well written Kashyap, but if that is the case and if 80% will pay Whatsapp, how-come nobody has paid to Whatsapp ! I never paid to Whatsapp till date and yet Whatsapp keeps extending my validity !

      I certainly do not think that this is how Whatsapp makes money, there is something else, probably selling our data or something different ? You see they are getting banned in different countries now !  

      Atul Saxena | | EDIT | REPLY