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How does WhatsApp make money ?

I would like to answer this question as I have been very interested in WhatsApp for a long time now - both in technology and the product.

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TL;DR => All the rumors and misconceptions around data-mining, customising ads, selling user data to companies are baseless and false! WhatsApp is not in the game to earn money.

Here, are some of the facts around WhatsApp :

1) They believe that messaging should be private and free. They also don’t want to sell ads to earn profit.

Here, is why they don't sell ads (explained on their official blog) - Why we don't sell ads?

Excerpts from it,
No one wakes up excited to see more advertising, no one goes to sleep thinking about the ads they'll see tomorrow. We know people go to sleep excited about who they chatted with that day (and disappointed about who they didn't). We want WhatsApp to be the product that keeps you awake... and that you reach for in the morning. No one jumps up from a nap and runs to see an advertisement.
Remember, when advertising is involved you the user are the product.
That's our product and that's our passion. Your data isn't even in the picture. We are simply not interested in any of it.

At this point, they relied on subscriptions of $1 after one year free service and considering how quickly they grew to about 500 million, this was the way to pay for salary and other expenses.
2) There is another common rumor - “Facebook has now access to everyone’s profile, data, private chats, pictures and conversations”.
Clearing the rumor around Facebook acquiring Whatsapp - Setting the record straight
From the above blog =>
Respect for your privacy is coded into our DNA, and we built WhatsApp around the goal of knowing as little about you as possible: You don't have to give us your name and we don't ask for your email address. We don’t know your birthday. We don’t know your home address. We don’t know where you work. We don’t know your likes, what you search for on the internet or collect your GPS location. None of that data has ever been collected and stored by WhatsApp, and we really have no plans to change that.
If partnering with Facebook meant that we had to change our values, we wouldn’t have done it.
Speculation to the contrary isn’t just baseless and unfounded, it’s irresponsible. It has the effect of scaring people into thinking we’re suddenly collecting all kinds of new data.
After the facebook acquisition, the employees are on Facebook payroll and so they get paid from it.
3) So, what's in it for facebook to buy it for $19B?
  • WhatsApp has crossed over a billion user base - One billion - WhatsApp Blog
  • WhatsApp was a direct competitor of Facebook's own Messenger app and now since both are under one umbrella, Facebook can better integrate to invite more people to Facebook. This in turn means more users, it can show ads too.
  • One of the most important reason - WhatsApp is built by a team of 50 people, mostly engineers and the system is able to support more than 1 Billion users. Imagine the number of messages flowing in and out every minute and yet, there isn't a single message drop or any message arriving out of order. It all works flawlessly and perfectly. The WhatsApp server is a truly magnificent piece of software and hardware coming together.
I have built messaging servers myself and know how tough it is to mix protocols (TCP vs HTTP vs WebSocket) to achieve near real-time messaging and how the machine starts to break apart around 65K connections. Yet, they boast of 2 Million connections on a single machine in 2012 - 1 million is so 2011
Having a hand on such technology contributes a lot to make the $19B worth it.
4) They don’t even earn from subscriptions anymore. They moved to a completely free business model in Jan 2016 - Making WhatsApp free and more useful.
…people might wonder how we plan to keep WhatsApp running without subscription fees and if today's announcement means we're introducing third-party ads. The answer is no. Starting this year, we will test tools that allow you to use WhatsApp to communicate with businesses and organizations that you want to hear from.
To conclude - there are only very few things that are free and enjoyable - water. air, love and whatsapp happens to be one of them.

Source : Quora


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