Currently, WhatsApp is worth more than $19 billion.
This might be shocking to any person who cannot stop wondering how a free app can be worth this whole lot of money. However, the fact that Facebook paid $19 billion to acquire WhatsApp means that some free apps are viable and full of potential to bring in more than what other people can imagine. Therefore, how does a free app such as WhatsApp make money?
Free apps such as WhatsApp make money in several ways as shown below:
- App Purchases
The world is full of individuals and organizations that are always willing to spend money on new apps. If you want to download WhatsApp, you will have to part with around $1. This might not seem like much money, but consider the number of people who are paying the $1 to download the app around the world on any given day. It adds up to plenty of dollars. In some countries, downloading the app is free for the first year. For each subsequent year, you have to pay $1.
- Extra Features
It is also possible to download WhatsApp without paying a single dollar but pay more when you need extra features. Inbuilt resources, power-ups, and lives are some of the features for which you will pay more to get from WhatsApp. With such an approach, it is not surprising to see free apps making money. If a user wants more features than what other users have, he would have to pay more, thus enabling the app to make money.
All favorite apps come with advertisements. Even YouTube and Facebook feature apps. All the most popular free apps are looking for ways to monetize and advertisements is one effective method of making money. WhatsApp has made the platform ripe for ads. Brands are willing to make their products visible to a large pool of potential customers, which they can get through a free app such as WhatsApp. Brands are ready to pay top dollar for the advertising platform.
So why did Facebook pay $19 billion for WhatsApp?
Overall, Facebook was attracted to WhatsApp for the following reasons:
- The app is worth that much and more to Facebook
- The opportunity for growth is great
- The future prospects are amazing
- Behavioral data
- Contact lists
- Ensuring that the app does not end up with Facebook’s competitors
Thus far, WhatsApp has lived up to its objective of being a better alternative to SMS or text messaging. The fact that it costs less than text messaging has made WhatsApp attractive to more than 450 million users around the world. The app has made money in the past and will make more with Facebook.