WhatsApp was founded in 2009 by Brian Acton and Jan Koum. WhatsApp is a messaging service.The app allows users to upload their audio files, video files, contacts, text messages to anyone who has the same app free of cost. WhatsApp is available for iPhones, Androids, Blackberries, Windows Phones, Nokia phones and now desktops also.

Also Read: WhatsApp Now Supports End-to-End Encryption For Chat Security

Facebook purchased WhatsApp for $19 billion:

Facebook  purchased WhatsApp in February 2014 for approximately $19 billion and according to the 2014 Facebook Form 10-Q, in the nine months preceding September 30, 2014, WhatsApp generated revenue of $1,289,000. Did you think ever How is WhatsApp making its money?

How Does Whatsapp Generate Revenue?

There is always a prominent question baffling every user’s mind – How is Whatsapp able to make money when its services are free of cost?

Whatsapp generates its revenue through two different ways-

1) It’s Subscription Fee: Whatsapp allows it’s user to enjoy the services for free for first year. However, after that it charges $0.99 for continued service. But till date, I have not heard of a single person who has paid for this service. Interestingly, it tends to extend the free service period every time a user reaches close to the expiry date.

So this method of revenue generation that seems like the only visible revenue generation scheme is actually not generating the revenue.

2) The revenue generation for Whatsapp is primarily through database management. All the conversations on Whatsapp are backed up on Whatsapp servers constantly. Our conversations reflect our interests, likes, dislikes and majorly depicts our preferences. This information is invaluable to big firms where relevant tailor made products can be offered after data sorting.

Given such high number of users, the number of messages exchanged per day is also incredibly high in case of Whatsapp- peaking as high as 11 billion. With such extensive information available on Whatsapp backups, the big companies are willing to pay handsome amounts for information extraction.

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