Whaaat?

WhatsApp—a quick, easy, inexpensive way to trade text messages and photos—is now the second-most popular app on Earth (not counting the apps Google and Apple bundle with their own mobile operating systems). Only Facebook’s own app reaches more people. Since Facebook purchased WhatsApp—and many questioned whether Mark Zuckerberg and company had grossly overpaid for the startup—the audience has more than doubled.

Tell me more!

Previously, WhatsApp was free for a year, after which the company would charge a mere $1 annually. Koum and company are now dropping the $1 fee completely. And in the months to come, they’ll begin experimenting with ways of generating revenue via the myriad businesses that use the messaging app.

Whatsapp has done really well in the consumer space, but there is whole other aspect of communication as you go through your day: You want to communicate with businesses.

Rather than picking up a phone or visiting some other app, you could just send a WhatsApp message to reserve a table and get your confirmation—the same app you likely used to make dinner plans with your friends in the first place. Maybe the restaurant replies with three different options and I just tap on a button and the reservation is made.

The move is part of a larger trend across the sprawling universe of mobile messaging apps. Facebook also offers its own Facebook Messenger, and under the guidance of former PayPal CEO David Marcus, it too is expanding mobile messaging into businesses, including airlines (checking flight statuses), online retailers (tracking orders), and Uber (getting a ride).

But the US isn’t really the market that matters to WhatsApp. While Facebook Messenger is more popular in the US, WhatsApp is dominant in places like India and Brazil and Africa. That’s why Facebook has two messaging apps: each is chasing the same goal, just in different places.

In these places, WhatsApp didn’t just remake online communication. It defined this communication. Now, because it’s so popular in places like India—and because there aren’t an enormous array of alternatives—WhatsApp has a good chance of becoming a hub for business services, just as WeChat is in China.

In the meantime, WhatsApp is working to expand the use of encryption on its service, an effort to protect user privacy. And it is moving beyond texts, photos, and videos to offer voice calls. Like Facebook and WeChat, WhatsApp is already more than messaging app. The question is just how much farther it will go.

My 2 cents:

Whatsapp’s monetization strategy will be best executed if it focuses on the markets it is dominant in, not only due to its relevance and “share of communications” but the mere fact that the technology wave hasn’t moved as fast in these regions. Much as WeChat pioneered the single source of services built into a widely popular messaging platform in China, Whatsapp has little to no competition in India and Brazil in pioneering the idea that you might never have to leave Whatsapp! The main stumbling block however might be the cyber-threats that come with online money transfer mediums; insert former PayPal CEO David Marcus’ expertise here.

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