The WhatsApp effect is real and everyone loves it
WhatsApp is the most popular mobile messaging platform today, amassing a whooping 700 million active users. It allows consumers to send text messages, videos, and photos to any platform for free, using up only data. It is a mobile juggernaut, bought by Facebook in 2014 by jaw-dropping $19 billion, and has what is called the 'early mover' advantage. However, it has yet to turn a profit.
In the first half of 2014, WhatsApp's turnout was a $232.5 million loss, with a $15 million revenue. But Facebook wasn't looking to make a quick profit when it overpaid for the cross-platform messaging app; CEO Mark Zuckerberg said his goal is to get people connected, and WhatsApp is helping do just that. The platform carries over 30 billion messages per day.
The app was founded in 2009 by two ex-Yahoo employees, Jan Koum and Brian Acton. They were both disheartened with their former company over the excessive focus on advertising. They wanted to create a simple platform with no gimmicks and no ads. That's why WhatsApp gained momentum: users don't have to register, using only their phone number, and there is no ad anywhere in sight. Direct advertising and soliciting are forbidden, but that doesn't mean companies can't use it for marketing purposes: Blasting News, for instance, uses WhatsApp as a communications channel, to deliver its news in multiple languages.
Funny enough, both Koum and Acton applied for jobs at Facebook after they left Yahoo, but none were successful. Their wish eventually came true with a huge cash and stock bonus last year.
The business model, right now, is selling the app after making it free for a year, by a very low price: 65p, or $0.99. It is not clear how Facebook intends to monetise the app, even more so as it grew by making free something that used to be paid for on mobile networks.
Furthermore, the company is facing some trouble in Brazil, where a judge ordered its suspension in the country. The legal order is linked with the investigation of crimes allegedly committed using the app; WhatsApp refused to cooperate, saying it does not own offices in the country.