More than eight years after agreeing to buy one of the world’s largest messaging apps, the company formerly known as Facebook has decided to start making money from it.
WhatsApp, the popular messaging service owned by Meta, the parent company of Facebook, said on Thursday that it was opening up commercial services to those who want to use the messaging app to power their businesses. It was WhatsApp’s largest step towards making money from the service, which is used by more than a billion people globally.
The new initiative lets business owners access the WhatsApp Cloud Application Programming Interface, a way to build a custom dashboard on top of the WhatsApp software so they can chat with customers and offer customer services more easily.
“This is an important step to help more businesses connect with people and help more people message the businesses that they want to support – big and small,” said Mark Zuckerberg, Meta’s chief executive, at an event announcing the new service.
WhatsApp plans to charge users based on how many conversations they have with customers per day, ranging from a fraction of a cent to more than 10 cents a conversation, depending on the region. It also plans to offer a free tier with limited services for small businesses.
The move is Meta’s strongest signal that it wants to begin making meaningful revenue from WhatsApp, especially as it faces business challenges on several fronts. Facebook acquired WhatsApp in 2014 for 22 billion, the company’s most expensive acquisition. For years, WhatsApp was free to use while costing Meta hundreds of millions of dollars to operate and support.
Now making more money has become paramount. Meta’s advertising business has been hurt by Apple’s changes to the iPhone operating system, and the company lost tens of millions of users in Russia after being banned in the country. The war in Ukraine has also upset some of Meta’s advertising operations.
In addition, Meta is navigating a tricky transition to become a “metaverse” company that provides people with immersive digital experiences. In February, a quarter of the company’s market value was wiped out – more than 230 billion – after a dismal earnings report.
WhatsApp has historically been hesitant to make money from its service. The company’s founders swore off advertisements on the app, and after dabbling with the notion of charging each user $ 1 annually to use the service, Facebook executives nixed the idea as too anemic and difficult to scale.
By 2018, WhatsApp founders were headed out the door. Mr. Zuckerberg announced a plan to stitch together all the messaging services on the apps he owns – WhatsApp, Messenger and Instagram. The company made changes that allowed Facebook to glean more insights about how people use WhatsApp. WhatsApp maintains none of those changes were used for ad-tracking purposes.
Simultaneously, WhatsApp’s reach continued to spread globally, embraced by millions of users in Brazil and South America, as well as across the Middle East and much of the European Union.
Many of them included small and medium-size businesses that used WhatsApp for free to speak with customers. But the experience, WhatsApp has said, was clunky and sometimes difficult to navigate, and wasn’t designed with business services in mind.
WhatsApp’s new product is supposed to answer to such issues, and can let those businesses communicate more easily with their customers using the app. Cloud hosting storage will also be provided to businesses that pay for the Cloud API.
Mr. Zuckerberg said that WhatsApp’s more than one billion users connect with businesses across the messaging service every week, and that the new product would make things easier for businesses and customers.
“Today, most of us use our feeds to discover interesting content and stay up to date,” he said. Zuckerberg said at the event. “But for deeper levels of interaction, messaging has become the center of our digital lives.”