Whatsapp is now free! Ok, in this part of the world most of us have never paid a dime to use it. Though it is clearly stated for first time users of the app that, after the first year, they must shell out $1 to continue using the app. I have being using Whatsapp for so many years and never had to pay. All those upgrades always tend to renew my free subscription. It is the same with most people in poor countries or countries that are not rich enough (determined by Facebook) to pay $1 for Whatsapp.
Since Facebook bought Whatsapp a couple of years ago for a whooping $19 billion, the app has largely remained unchanged apart from a few features added to make the user interface better looking and an ability to make calls. The app has continued to remain very popular around the world. Even in the face of stiff competition from other instant messaging apps.
Today nearly one billion people use Whatsapp. Do the maths. If half of those pay the one dollar subscription fee, that is $500 million easy money for Facebook. So why is Facebook spurring such easy money? After all nobody (for those who have being paying the annual subscription fee) is complaining about the surcharge. In a blog post yesterday, the whatsapp team tried to explain the reasons behind the decision; saying,
“For many years, we’ve asked some people to pay a fee for using WhatsApp after their first year. As we’ve grown, we’ve found that this approach hasn’t worked well. Many WhatsApp users don’t have a debit or credit card number and they worried they’d lose access to their friends and family after their first year. So over the next several weeks, we’ll remove fees from the different versions of our app and WhatsApp will no longer charge you for our service.”
So that is it in a nutshell. Facebook are concerned that there is no point charging for a service if majority of the people who use the service cannot pay for it. To be sure, even the few who can pay would still add a significant amount into Facebook’s coffers. Or perhaps, Facebook ,which is now worth $268 billion, felt a few hundred additional million wasn’t worth it.
So what next for Whatsapp as a business model? Do they have a grand plan to make more money than before? Here is the Whatsapp team again explaining how they intend to make money,
“Naturally, 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. That could mean communicating with your bank about whether a recent transaction was fraudulent, or with an airline about a delayed flight. We all get these messages elsewhere today – through text messages and phone calls – so we want to test new tools to make this easier to do on WhatsApp, while still giving you an experience without third-party ads and spam.”
So in the next few months, people might start getting messages from big companies and service providers through Whatsapp. Would people find it intrusive and a sort of invasion of their privacy? I can imagine the stink it would raise if it turns out Facebook is selling our private info to these companies so they can contact us through Whatsapp.