Users of the chatting application “WhatsApp” exchange dozens and even hundreds of messages daily. Regardless of how exciting or boring the conversations we have with family members, friends and colleagues on that platform are, the communication is (by default) encrypted.
Our worry-free chat uses powerful computer servers of the company “WhatsApp” located in different data centers around the world.
It is not cheap at all, and yet none of the nearly three billion users in the world have paid for the service of using or downloading the application. So how does WhatsApp make money?
It certainly helps that WhatsApp has a huge parent company behind it – Meta, which also owns Facebook and Instagram.
Individual, personal accounts on this platform are free because “Votsap” makes money from corporations that want to communicate with such “small” users.
Since last year, companies can open channels for free on WhatsApp so they can send messages that will be read by anyone who chooses to subscribe. However, what they do pay for is the ability to interact with individual customers through the app. It can be a conversation or a transaction.
Payment “from chat”
Great Britain is a beginner in this field, but in the Indian city of Bangalore, for example, you can buy a bus ticket and choose your seat through the app WhatsApp.
“Our vision, if we get this right, is that the business and the customer should be able to do things right within chat,” explains Nikila Srinivasan, vice president of business messaging at Meta.
“That means if you want to book a ticket, if you want to return something you bought, if you want to make a payment, you should be able to do it without leaving the chat. And then just continue the other conversations.”
Businesses can now also choose to pay for a link that launches a new chat directly from an online ad at Facebook or Instagram to a personal account.
Nikila Srinivasan says this option alone is worth “several billion dollars” to the tech giant.
What is the situation with the competition?
Other messaging apps have taken different paths. Signal, a platform known for its industry-standard message security protocols, is a non-profit organization.
They claim that they have never taken money from investors (unlike the app Telegram). They operate, they say, thanks to donations, which include $50 million in cash from Brian Acton, one of the founders of WhatsApp.
“Our goal is to get as close as possible to being fully supported by small donors, that is, a large number of small donations from people who care about Signal” wrote company president Meredith Whitaker in a blog post last year.
Discord, a messaging app mostly used by young video game fans, has a free option (freemium) – registration is free, but additional functionalities, including access to games, have to be paid for.
Also, this platform offers a paid membership called Nitrowith benefits that include high-quality streaming and custom emojis, for a monthly subscription of $9.99.
“Snep”, the company behind it Snapshotscombines several funding models. Advertisements appear within the application, then 11 million users pay a subscription as of August 2024, and the company also sells augmented reality glasses called Snapchat Spectacles.
The company has another trick up its sleeve – according to the website Forbsbetween 2016 and 2023, the firm earned nearly $300 million in interest alone. However, the main source of income for “Snap” is advertising, which brings in more than four billion dollars a year.
UK-based Element charges governments and large organizations to use its secure messaging system. Customers use the company’s technology, but run it themselves, on their own private servers.
The company, which has been in business for 10 years, has “double-digit million in revenue,” says its co-founder Matthew Hodgson. He believes the most popular business model for messaging apps remains the perennial digital favorite – advertising.
“Many messaging platforms sell ads by tracking what people are doing, who they’re talking to, and then targeting them with the best ads,” explains Hodgson.
The idea is that even if there is encryption and anonymity, apps don’t need to see the actual content of the messages being shared to learn a lot about their users, and can then use that data to sell ads.
“It’s the old story – if you’re the user of something and you’re not paying for anything, then chances are you’re the product,” adds Hodgson.
Source: www.sitoireseto.com
