Social networking has become a vital part of people’s lives in the present scenario. Facebook, Twitter, Orkut are some examples of social networking sites and Hike, WhatsApp, Line, Wechat, Messenger, Viber etc are some of the examples of instant messaging applications in mobile phones.
Out of these, WhatsApp has rapidly grown in few years whose users have increased from 100 million users to 900 million users till August 2015. WhatsApp was founded by two people, Brian Acton and Jan Koum. It works on almost all operating systems like iOS, Android, BlackBerry 10, BlackBerry OS, Windows Phone, Nokia Series 40, Symbian, Tizen etc. WhatsApp provides a wide range of facilities such as sending messages, smileys, locations, contacts, music and videos. Calling facility was later made available. Due to this high level of flexibility and ease, Whatsapp has become very popular worldwide. It has a good level of privacy and security. The users can easily change the privacy level of their account, provided by the app.
Initially, it faced a large number of security problems and brought out solutions for it. It cannot be so easily hacked by any person. Facebook acquired WhatsApp on February 19, 2014, at a cost of US$16 billion. Many times it was questioned whether the business model or plan of the company would be long-lasting or not. But WhatsApp earned its money from a variety of sources. It provides one-year free use for the customers and for each successive year the user has to pay an amount of rupees fifty (Rs 50) to keep his WhatsApp account running. WhatsApp allows for connecting to people across the globe and does not take money for the text or media a person sends. Instead, it uses the same internet data plan that is used by the person for emailing and browsing etc. App purchase is an interesting and easy way by which it also makes money. In certain countries, the app costs $1 to be downloaded. When a group of friends start using the app, others also gain interest and start downloading it. Thus, the $1 plans can give a huge profit to the company.
Whatsapp has been providing its service from past 10 years and another form of its revenue comes from Database handling. The huge customer base of Whatsapp contributes to its database which is actually large in size. Each and every day our conversations are being stored in the backups. The information in our conversations reflects our persona and preferences. This information is quite useful for various companies. So these companies pay a handsome amount of money which builds the largest portion of the Whatsapp revenue model.Though it’s not confirmed it really do sell its analysed data.
If we analyse the user base, we will find that Whatsapp has the largest user base which is increasing exponentially every year. Naturally when a user starts using an application, the people around also start using the application to communicate. Whatsapp has a cleaner interface which has the sole purpose of communication. The application hosts no advertisements at all. The clean and fast interface along with other features like Voice calling and to be launched Video Calling features to make this app one of the most downloaded apps.
Whatsapp, after being bought by Facebook, gives huge revenue of around $19 million a year. The revenue model taken up Whatsapp is by far very simple and the main concept is that the large user base. Whatsapp believes that the application is for communicating purpose, it doesn’t endorse any advertisement as it would hamper its sole utility. It is also evident that if Whatsapp starts putting advertisements in the app, considering its user base, would be able to make a lot of money. But the policies and the user-friendliness of WhatsApp show that it is not completely about money after all.