How does WhatsApp make money? How does FaceBook make money? Why WhatsApp was sold?

Hello Friends!

So, What's going on?

I hope everything will be fine.

I know you all were waiting for the new blog.
So here's it!

I've mentioned the cause of the delay in the previous post - Important Message

Sorry for it, From today, I'll be consistent.

Anyways let's get started!

I think today's topic is going to be interesting, you all might be very curious to know the reasons.
WhatsApp was developed by Jan Koum and Brian Acton in 2009. They both were ex-Yahoo employees.

You might be wondering that WhatsApp is a completely free App, no in-app-purchases, and even no Ads display on the app, so, how they earn money?  There is one famous quote that~

If you aren't paying for the product, then you're the product.

Let me divide the scenario into two parts one is before the ownership of Facebook and the other is after its ownership.

Before the ownership of Facebook-

In initial days, WhatsApp wasn't free, You've to take a subscription for a year. When WhatsApp was developed, its popularity increased tremendously, and no. of downloads were growing exponentially. So the developers decided to make money through it, and they simply made it a paid application. While in some countries it was free for the first year. It launched in India in 2010, and it becomes popular very soon because we've not any messenger application at that time, even Facebook messenger was developed later on.  

Seeing Whatsapp growth, Facebook was thinking to buy it. Facebook knew that it'll give tough competitions to him in near future. So, they simply bought their competitor ( I mean WhatsApp).

Facebook offered a huge amount and purchased WhatsApp in 2014 for $ 19 billion. It was one of the biggest Tech Deal at that time. At present, The parent company of WhatsApp is Facebook.

Now let's move further!

After the ownership of Facebook-

When Facebook acquired WhatsApp, a 'No Ad Policy' agreement was signed between them. WhatsApp founders emphasized them to not display Ads on their application. So, for monetization or generating revenue from WhatsApp, another way came into the picture. 

Before discussing let's see How Facebook works?

Whenever an account is created on Facebook, it gets stored in their database. And in today's world, they have the largest database than any company or brand. Almost half of the world's population has Facebook account out of which they've 2.6 billion active users. At present they know more than us about ourselves. They know each and everything about- where do we go for work? what do we eat? where do we live? what are our ages and gender? what are our dislikes and likes? what are we interested in? what are our hobbies? what are our plans and schedule?  about our family and relatives and many more that we can think of. They know these things through our status, stories, bio or intro, chats, and messages, check-ins, likes, photos, videos, and comments, etc. Facebook has lots of personal data. In such a situation, we forget about our privacy because we've already given more to them.

Now you can conclude how much big database they have. So the big companies, brands, businesses approach Facebook to display their advertisement on their social platform according to people's interests, likes, and dislikes. They show targetted Ads to their users what they actually need. So after buying WhatsApp, their database is further grown up. They know which WhatsApp account is associated with which Facebook account. This increased their Ads preferences and their Ads become more personalized. Their turnover or revenue has increased significantly after acquiring WhatsApp.

This is because of the popularity of it. Advertisers approach facebook for displaying the Ads, for that they charge huge money from advertisers, there are many advertisers worldwide, some of the money they spend on maintenance of Facebook and giving salary to their employees and rest is their profit.

Facebook also bought Instagram in 2012 for the same purpose. They earn about $ 12-13 per user per year from Instagram. And Instagram has about 1 billion active users, now you can do a little bit of maths to calculate their per year revenue from Instagram. This is a rough idea. 

Facebook-owned few more companies including WhatsApp and Instagram- Here's List.

Basically, Facebook became a superpower in the field of social networking after owning WhatsApp and Instagram.

Let me summarize it.

Facebook uses WhatsApp for improving their Ad service they aren't making any direct income from it, they're earning indirectly from it. They display personalized and targetted Ads based on your interest, surfing behavior, demographics, location, search history, etc. You've ever experienced that the product you've searched on amazon has displayed on your Facebook timeline. This is very common.

Let me talk about my experience.

One day I've visited a branded shop for buying something, the next day when I was scrolling post on Facebook, I've seen an ad of the same branded shop on my timeline and it was asking to rate your experience. I think my location was on at that time, Now, what can you say about it?

Now its time to wrap up.

I've discussed How do WhatsApp make money? How does FaceBook make money? Why was WhatsApp sold?

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Wishes and Regards

Author- Aman Tiwari

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