How WhatsApp makes money

If you are not paying for a product, then YOU are the product.This week WhatsApp has told its 2 billion+ users that they must agree to share their data with their parent company by Feb 8 failure to do so will have their account deleted. This has sent the WhatsApp addicted 2 billion plus people into a frenzy. This week sitting in the thought bar I will shed light on why WhatsApp is doing this.

HISTORY

WhatsApp was founded by Brian Acton and Jan Koum in 2009 after they left their job at Yahoo, and went traveling, to various parts of the world the need was to show their STATUS on the iPhone so they named it WHATSAPP. The story goes that they applied for a job at Facebook but were rejected so they continued to build WhatsApp and sold it to FB for a staggering 19 BILLION $ in 2014.

ACQUISITION BY FACEBOOK

After the takeover by FB the promise of an advertisement free messaging app was a drain on the company so they allowed WhatsApp to be downloaded and used for free in the first year and one had to pay 1$ to continue to use it the next year. About 700 Million people have paid 1 $ which became completely free later. Now the question is how WhatsApp making money is if there are NO advertisements

HOW DOES FREE APPS MAKE MONEY

Almost all free apps makes their money vide advertisements that pop up, Be it YouTube or your regular TOI newspaper or browsing for a hotel room on the net pop up ads can be stopped only when you start paying for it ( YouTube Premium)

HOW DOES WHATSAPP MAKE MONEY WITH NO ADVERTISEMENTS

In WhatsApp there are no advertisements so the only way to make money is to monetise that data that WA has with it your number, location, what you read, what you forward etc. Having 2 Billion plus people data is a gold mine and now they will share this with others and make money out of it. Well there is no compulsion to hang on with WA there are alternatives like SIGNAL and TELEGRAM if one really does not agree to their privacy policy.

Have you ever thought how a company can give away such a product for absolutely free? In the world of business, there are no saints after all. Here is the catch – the price you pay for using the app is your Data.

When you install WhatsApp and tap on that big green “I Agree” button, you are essentially giving access to lots of private information on your phone to Mr. Zuckerberg. The app has access to your entire address book, which means each and every contact record (names, phone numbers, emails, locations, job titles, etc.) are theirs. Since they also know your location (through your phone’s IP address), they can perform region wise data mining or analysis for their client companies.

Another more sinister use is that they can mine your messages and figure out your political inclination (right/left/centre) and exploit that data by selling it to various political organizations.

Facebook has a lot of information about us and with the help of WhatsApp it has collected more and more information about people. Facebook with the help of WhatsApp uses all this information for “Targeted Advertisement”.

How well they know you, well we all use Gmail right, just go ahead use Please find attached and don’t attach anything in mail, you will be prompted to attach something in mail. (They are reading your Mails)

You search for any flight ticket or any clothing on any website, you can see its advertisement pretty much after 5–10 mins in any page you might be browsing. (They are checking your search)

WHATSAPP FOR BUSINESS

The other way that WA makes money is thru WhatsApp Business ( see the difference in icon of both in the pic below) , where in this is a business account ( free of course) but in your profile page you can put in your company logo ( mostly for small business) your basic info like address, phone numbers, business timings location etc. The advantage of using WHATSAPP BUSINESS is that it can have chat labels, quick auto replies, predestined messages, supplier group announcement’s etc. A good example is the THE QUINT on WAB ( see 2 pics below) .It’s obvious that if you are going to use free WhatsApp to increase profits for your business WA will also send targeted advertisement’s to you   Apart from the above ways there is also WhatsApp Pay by which one can send and receive money and even if its only 1 cent per transaction the amount of money generated is huge because of its 2 Billion plus users.

CONCLUSION

In this connected world there is no way to escape because the phone that you are holding has a unique IP address and any one from any part of the world can track you so by WA asking you to agree to its new terms is nothing new or unique its ONLY a formality these tech giants already know everything about you.