Facebook a well-known social media platform that recently acquired the third-party app WhatsApp, has recently announced that it's eliminating the fees connected with the messenger. So how does Facebook monetize WhatsApp if it's free?
Facebook has done a bold move on making the messaging app free for its current 1 billion users, as announced on its company blog, but the company didn't do it half-heartedly. Reports have indicated that Facebook initiated it as a first step to gain even more profits. But how?
The popular messaging app will notsolely rely its revenue on the third-party advertisements. Instead, it will be focusing on business to customer services, as said in a statement released by Jan Koum, WhatsApp's co-founder and CEO.
That sounds like a sneak preview to future services that may be offered to its current user base.
Analysts have reported that making the app free is necessary if Facebook wants to maintain its top spot as a messaging service.
Initially, users would have to pay 99 cents for annual subscription fees to WhatsApp users after a year of service. Its previous subscription model did rake in good revenue for the company but Facebook now feels that it currently wants to focus on keeping and add more users.
"We currently monetize WhatsApp in only a very limited fashion, and we may not be successful in our efforts to generate meaningful revenue from WhatsApp over the long term," the company said in last year's press release.
It is clear that the company is moving towards functionality and transaction capabilities which is why making the messaging service free is just a small step towards financial and operational success for the business.
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