WhatsApp, a cross platform messaging app, has been relatively quiet since it was acquired by Facebook for $19 billion in 2014. However, the service has since grown at a rapid pace, and is now nearing 1 billion users. The resulting increase in attention has tech and social media journalists wondering how WhatsApp will make money, especially now that it’s a free service.
In a blog post announcing the switch to a free model, WhatsApp doubled down on its long standing commitment to keep the service ad free. In response to the speculation that third party ads are coming:
The answer is no. Starting this year, we will test tools that allow you to use WhatsApp to communicate with businesses and organizations that you want to hear from. … We all get these messages elsewhere today – through text messages and phone calls – so we want to test new tools to make this easier to do on WhatsApp, while still giving you an experience without third-party ads and spam.
WhatsApp wants to integrate its messaging system with businesses, such as airlines, banking companies, or even restaurants to deliver updates through the WhatsApp system. Anything from reserving a table while making dinner plans in a message thread, to an update relating to your bank balance could all be done within the app, with no need to navigate away.
The revenue details on these experiments is unclear, but it’s easy to assume businesses would pay a fee to WhatsApp to offer this kind of customer service and access. And a billion users worldwide seems like a very lucrative audience to tap into.
Cade Metz, a WIRED senior staff writer, notes that Facebook Messenger working on a similar strategy, and the Tencet-owned Chinese network WeChat has already seen success with this model. While it may be a new way of doing business to some, data indicates that it could be a very solid direction for both WhatsApp and Facebook.
Add in a payments infrastructure that further reduces the distance between customer and transaction and this model could prove to be a pivot in the way social networks think about doing business.