Q:

How does WhatsApp make money?

A:

Quick Answer

WhatsApp generates revenue through its $0.99 yearly subscription per user. Previously a paid app with lifetime access for $0.99, this mobile messaging app is free to download as of July 2013 and annually charges its users when their one-year trial is over.

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Full Answer

Despite its cheap subscription rate, WhatsApp boasts 600 million active users since August 2014, with 1 million more users registering to the service with each passing day. It is expected to reach 1 billion users in 2015 and deliver a substantial revenue to its parent company Facebook, which acquired the app for a net value of $19 billion.

Although WhatsApp is already primed for further monetization opportunities, Facebook CEO Mark Zuckerberg's strategy for the app is to emphasize user growth and improve the service before monetizing it. Sterne Agee analyst Arvind Bhatia predicts that WhatsApp can reach 2 billion users, along with $3.65 billion in revenue in 2021.

Unlike many other mobile software, WhatsApp does not earn money by selling advertisements. The developers behind WhatsApp regard advertising as an insult to intelligence and a disruption to the user experience. Since its inception, WhatsApp is designed for reliable messaging. It does not collect personal data, listen in on conversations and share information with ad networks.

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