WhatsApp: A Decade of Evolution and Innovation

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The Facebook-owned messaging app WhatsApp recently celebrated its 10th birthday with a look back at some of the key moments which track the platform’s rise to global dominance.

A decade ago, two former Yahoo employees launched an instant messaging application called WhatsApp. Built for early generation of smartphones that used 2G and 3G networks, WhatsApp offered a free and better internet-based alternative to then default SMS for text messaging.

WhatsApp allowed smartphone users to exchange photos, videos, and text messages without worrying about character limits or paying per message. Over the years WhatsApp has added more and new interactive features including video calling, group chats, and even stories.

Despite availability of number of alternatives launched in last decade, WhatsApp has remained the top instant messaging application in the world. The application has over 1.5 billion monthly users while India is one of the top markets with 200 million users.

Over the years, we saw them introduce numerous updates that made WhatsApp, the world’s most used texting app. Here are the most notable ones, to start of with:

2009: Photo and video sharing

2010: Location sharing

2011: Group chats

2013: Voice messages

2014: Read receipts

2015: WhatsApp Web

2016: End-to-End encryption, Desktop app, VIdeo calling

2017: Status stories

2018: Group calling, stickers

Up until Facebook acquired WhatsApp in 2015, they were just playing catch-up with the other messaging apps. But after they joined hands, things started evolving rapidly. The speed at which new features started rolling out accelerated, and it truly became more than just a messaging platform.

Features like group calling took a dig at the dated method of adding friends to a conference call. Live location sharing made communicating with friends a lot simpler, and also added a new layer of safety. WhatsApp Payments was genius, not only did it get rid of the unnecessary procedure of transferring money but also, eliminated the need to check back if the person received the amount. Status Stories emulated Snapchat’s marquee feature and made it mainstream.

Honestly, it’s impossible to imagine life without WhatsApp. It’s been a true disruptor that overtook its rival by providing a much better, simpler and easier experience, without succumbing to the pressure of ads. That could change in the near future.

What could be their business model in near future?

  • Transition towards a Freemium Business Model

The company has launched WhatsApp Business which lets users build their business profile and become a verified business on WhatsApp. The verified businesses can create their business profile along with certain important links to their website or Facebook page, set up auto responders, can even link their landline numbers with WhatsApp. The WhatsApp Business application is currently free to download and use for small businesses.The company has reportedly already been surveying users to understand to what extent and in what arenas would they like to send and receive communication to business, in order to rip out the scope for spam as far as possible. However, we can expect WhatsApp to introduce some in-app purchases and adopt a freemium business model in the future.

  • Revenue from P2P payment integration on their platform

WhatsApp’s peer to peer payment feature is now live in India, making it the first country to support in-app payment on the popular messaging platform which will further boost its position in the market and will make it a preferred application for monetary transactions. This will further benefit WhatsApp business in the company’s biggest market.

The sources for revenue could be credit card fees, merchant fees etc. Venmo has proven this business model. Don’t be surprised if WhatsApp follows the same route.

  • Integration with Facebook’s other platforms (eg. Facebook marketplace)

Although this is highly unlikely, the company could also look for new revenue sources by integrating WhatsApp with Facebook Marketplace. With WhatsApp’s mammoth user base and marketplace’s huge seller-buyer network with platform integration capabilities, company can generate revenue through WhatsApp’s integration with their other platforms.

How Much Revenue Can WhatsApp Generate?

All of the above strategies are is in line with Facebook’s strategy to monetize a platform once it crosses the billion-user mark and use organic interactions between businesses and users as the first step toward monetization. According to Forbes, WhatsApp could make average revenue around $4 per user by 2020. This could yield revenues of around $5 billion for Facebook in 2020, contributing about 9–10% of the company’s total revenues, according to their estimates.

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