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WhatsApp Is Meta's Next Huge Platform Swing
A dive into WhatsApp - Meta's next money making machine.
Olabinjo Adeniran
January 22, 2025
In partnership with
Private messaging app WhatsApp is Meta (formerly Facebook) Platform’s largest acquisition. For nearly $20BN, Facebook purchased WhatsApp in 2014, and since then, the product has made $0, while the company has spent the last 10 years building one of the most incredible social and messaging platforms.
While Meta Platform has launched many buzzy products, such as smart glasses, a metaverse (whatever that means), and an AI bot, WhatsApp will be the company's next huge revenue driver.
In this case study, we will examine Meta’s feature ramp-up within WhatsApp and how it hopes to monetize this product successfully.
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Let’s dive into it! Please feel free to jump sections.
First, What is WhatsApp?
WhatsApp is a social messaging platform that enables primarily text-based communications between users of its apps. These texts could happen 1:1 for personal messaging or in private groups. This definition is crucial because WhatsApp differs from other apps in this category that favour public sharing of messages or content.
What’s so special about WhatsApp?
When smartphones really took off in the 2010s, WhatsApp (founded by Jan Koum) was one of the few apps that took advantage of the contact graph (by importing contacts to the app), enabled messaging with friends and family around the world and was fast, secure, and reliable. It also worked on literally any phone that connected to the Internet. These features created a strong network effect - while every other app was confusing to use, was slow, or didn’t work for the phones I had, WhatsApp worked and was just plain simple. Anyone could sign up and text their contacts without needing friend requests, adding or following people or much friction. If a contact had WhatsApp, you could message them immediately.
How does WhatsApp make money?
WhatsApp has never made much money. In its early days, it charged users about $1 per year, largely optional because several users reported never paying this fee. Running a global messaging app costs a lot of money, though. In 2013, it ended the year with $148 million in expenses and $138 million in losses. Thus, despite having 400 million users, WhatsApp made only $10 million in revenue.
Enter: Meta.
In February 2014, Facebook acquired WhatsApp for $19 billion in cash and stock. By 2016, WhatsApp CEO Jan Koum announced the company would no longer charge the $1 fee to remove the barrier to access for users without cards. Two years after acquiring WhatsApp, the company effectively decided to drive revenue to $0.
Under Meta’s leadership, WhatsApp grew to over 2.95 billion monthly active users in over 180 countries, making it one of the most important free apps. Period.
Let’s take a look at how Meta has prepared WhatsApp to be its next-generation social platform. I’d review new product features and explain how they tie into Meta’s vision: building the future of human connection.
WhatsApp’s New Features
WhatsApp Messaging API
Meta first opened the WhatsApp platform to developers and businesses that wanted to reach their customers via WhatsApp messaging. These tools enable developers to build rich and interactive messaging experiences for customers who opt-in to their service. WhatsApp then charges developers a fee to access the platform and send messages to WhatsApp users.
Several businesses have used this platform to engage their customers, governments have used it to share public information during health crises like COVID-19, and several thousand startups have built customer relationship software on the WhatsApp messaging API.WhatsApp Business
WhatsApp Business is a robust application that allows businesses to manage customer relationships. This tool helps companies showcase products, respond to customers (in chat) when they make inquiries, and get paid. WhatsApp Business is free for any business, and WhatsApp doesn’t charge for this service.
WhatsApp Chats
WhatsApp has improved its chat feature set in the last two years, rapidly shipping new features out of beta and constantly updating the app. Some new features include typing indicators, interactive replies, chat categorisation, transcription, an AI bot, and more. It also has features that allow WhatsApp to work seamlessly across devices.WhatsApp Payments
WhatsApp Payments enables peer-to-peer and consumer-to-business payments. It is currently being piloted in India, Brazil, and Singapore; the service allows WhatsApp users to link their bank accounts (or other payment methods) and send money to businesses and family members.
WhatsApp Pay has taken off in India, and hundreds of thousands of businesses now receive money from millions of customers. We couldn’t find proof that Meta charged businesses a fee for this feature.WhatsApp Status
Meta Platforms is not new to incorporating social media features across its platforms. In 2017, Meta integrated the disappearing story format into WhatsApp Status, following its incorporation into Instagram and Facebook. WhatsApp Status works like Instagram and Facebook Stories, enabling users to broadcast videos, photos or text messages to a select group of contacts.WhatsApp Communities
WhatsApp Communities leverages the group chat social paradigm and enables people to build large-scale communities inside WhatsApp. Previously, community managers and conveners created simple group chats. The Communities feature goes much further, allowing managers to create several groups in one community and manage messaging, administration, and access levels.WhatsApp Channels
So far, all the features we’ve discussed have involved closed communications and contact sharing between one party or the other. But what if one wanted to broadcast publicly via WhatsApp without having the target’s contact? Meta has launched WhatsApp Channels - a feature for brands, businesses, celebrities, and anyone to talk to the public on WhatsApp.
A WhatsApp Channel is like a regular chat within the “Updates” section. While users cannot reply to the chat, they can interact by leaving emojis, copying a link or forwarding the post.
WhatsApp highlights popular channels that users can follow. Users see channels to follow based on their location (phone numbers drive this), channels already followed, and other heuristics. The company has also successfully seeded this by ensuring the most prominent brands, celebrities, creators, and sports teams are well represented in this new format.
Tying these together…
By connecting individuals - friends, colleagues, associations, communities, etc, WhatsApp has built one of the stickiest and most important social apps. In the last few years, we’ve seen WhatsApp build more features (Status, Communities, Business) that expand the real estate(more places to swipe to and more things to do) in its apps while connecting businesses to customers via WhatsApp Business and WhatsApp Payment.
Connecting businesses to consumers is a goldmine for social apps like Facebook, Instagram, Snapchat, and Twitter. At current growth rates, social media ad spending was $219bn in 2024, and projections are near $255bn by 2028.
By building features like Channels, WhatsApp has seeded a private and localised interest graph for each user. It can deduce a user’s interests based on the channels they follow and the businesses they interact with, and create a profile for each user. Then, it will charge other companies for access to the user via paid advertising and promotions in different formats.
WhatsApp Ads
In a 2023 interview with the New York Times, Meta Founder and CEO Mark Zuckerberg discussed WhatsApp as the company's "next major pillar.”
He said:
“If you’re envisioning what will be the private social platform of the future, starting from scratch, I think it would basically look like WhatsApp”
To corroborate this product roadmap and vision, a recent report by Rest of World talks about WhatsApp’s advertising plans and quotes Alice Newton-Rex, WhatsApp’s Vice-President of Product:
Newton-Rex said privacy is “in the DNA” of WhatsApp and that the company is trying to clearly communicate with users about what privacy protections WhatsApp offers and where. That includes AI products. “The cornerstone of this is transparency. We’re not relying on the expectation that people have,” she told Rest of World. “We’re investing in user education.” Newton-Rex also said that while Meta is considering allowing ads on WhatsApp, those ads will never appear in users’ main inboxes. Instead, she said, the company is assessing incorporating ads into WhatsApp’s Channels feature, which allows users to publicly broadcast messages to lists of followers.
WhatsApp Ads is a welcome announcement for businesses already spending on Instagram and Facebook. When Meta launches ads, it’ll again deliver another marketing channel and more marketing tools to drive business growth. For users, the company is bringing promotional material into WhatsApp, a place largely devoid of ads and promotional material. Given the success of Facebook and Instagram, Meta already knows how to build ad tools and formats that make users and businesses happy.
As previously stated, by leveraging phone numbers, locations, and various heuristics, WhatsApp could establish a robust interest graph to enhance its ad-selling and data-targeting operations. It could also integrate user behaviour with their Instagram and Facebook information—something previously attempted and reversed in 2016—thereby significantly enhancing WhatsApp's advertising functions. While drafting this case study, Meta revealed a new feature enabling users to automatically share their WhatsApp Status on Instagram and Facebook.
Before Meta’s big futuristic bets begin to pay off (or not), it must earn more income and return value to shareholders. WhatsApp presents a perfect opportunity but also brings risks. Chat is a unique application interface that doesn’t allow for many interruptions. The company seems to have figured this out by expanding WhatsApp’s features to increase real estate and time spent. Following Instagram and Facebook, Whatsapp’s monetization efforts are likely to be successful.
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