Skip to main content

Whatsapp is Ad-Free Because Facebook Has Better Way to Make Money | Digital Trends



The Wall Street Journal reported on Thursday that Facebook has shelved its plan to bring ads to WhatsApp Status — a monetization move that had seemingly been under development for about two years and was also reportedly responsible for the departure of both of the instant messaging app’s original founders. The team tasked to figure out the most optimal method for incorporating ads inside the messaging app was broken up too, people familiar with the matter told the WSJ.
The report caught many by surprise. After all, WhatsApp has, on multiple occasions, confirmed that ads were coming to the app and even previewed what they will look like at the Facebook Marketing Summit last year. More importantly, Facebook earns most of its revenues from its ad network and expanding it to WhatsApp was one of the ways the social network was expected to cash in on its hefty $22 billion investment.
So what convinced Facebook that ads were not the right fit for WhatsApp?
For a company that refuses to fact-check political ads simply because it may end up costing millions, this is likely not a moral call in an attempt to retain WhatsApp’s ethos, the same one Jan Koum and Brian Acton committed to and tried to protect before they were overruled by their new superiors in Menlo Park.
No, Facebook has instead figured out a monetization route that will potentially be more lucrative and scalable than ads — WhatsApp Business.
In early 2018, Facebook began rolling out a banquet of tools for businesses that rely on WhatsApp to communicate with their customers. The new services allowed merchants to set up digital storefronts, offer customer support, send updates on orders, build automated bots, and more — all right on WhatsApp.

A better place for business


In several countries like India and Brazil, WhatsApp is the internet for a lot of people, and a range of small- to medium-scale sellers rely exclusively on it to take orders and market their products. Incidentally, these are also the regions where returns on advertisements are not as significant as, say, the U.S. or Canada.
For instance, in 2017, Facebook was earning 1,000% more per user in the U.S. and Canada ($19.38) than Asia ($2.13). Businesses want to be where the users are and in such countries, that place is WhatsApp.
A source in the WSJ report added that Facebook has indeed shifted focus to WhatsApp’s new business products. It’s e-commerce that the company has now trained its sights on and, so far, it’s working out fairly well.

Rapid adoption


In its first year of operations, WhatsApp India reported a revenue of $1 million, up from absolutely nothing in the year before that. That’s a pittance for an app used by hundreds of millions of people in that country alone. From brands as small as housewives to large conglomerates, WhatsApp Business has met with rapid adoption. Globally, it already has over 5 million clients — businesses that use it to sell their goods and services.
Plus, with a user base of over a billion people, WhatsApp Business practically has no competition and a zero starting cost, which makes it a no-brainer, especially for smaller businesses that can’t afford the cuts other e-commerce platforms like Amazon take. WhatsApp is also expected to launch digital payments soon in a handful of countries, which, at the moment, is the only missing piece from its e-commerce puzzle.
Facebook has incessantly explored monetization avenues for WhatsApp ever since the 2014 acquisition, and it seems to have found one in WhatsApp Business. It’s clear now that dropping WhatsApp’s dollar fee was also a conscious decision in 2016, as the social network can extract more revenue by profiting off of businesses than by shoving ads into a section that’s actively employed only by one-third of its total users.
We have yet to officially hear from WhatsApp and Facebook on this report and will update the story once we have a response.

Editors’ Recommendations


Originally published at https://www.digitaltrends.com 

Comments

Post a Comment

Popular posts from this blog

Ransomware's Dangerous New Trick Is Double-Encrypting Your Data

  Ransomware groups have always taken a more-is-more approach . If a victim pays a ransom and then goes back to business as usual-hit them again. Or don’t just encrypt a target’s systems; steal their data first, so you can threaten to leak it if they don’t pay up. The latest escalation? Ransomware hackers who encrypt a victim’s data twice at the same time. Double-encryption attacks have happened before, usually stemming from two separate ransomware gangs compromising the same victim at the same time. But antivirus company Emsisoft says it is aware of dozens of incidents in which the same actor or group intentionally layers two types of ransomware on top of each other. “The groups are constantly trying to work out which strategies are best , which net them the most money for the least amount of effort,” says Emsisoft threat analyst Brett Callow. “So in this approach you have a single actor deploying two types of ransomware. The victim decrypts their data and discovers it’s not act...
Post a Comment
Read more

Babuk ransomware is back, uses new version on corporate networks

  After announcing their exit from the ransomware business in favor of data theft extortion, the Babuk gang appears to have slipped back into their old habit of encrypting corporate networks. The criminals are currently using a new version of their file-encrypting malware and have moved the operation to a new leak site that lists a handful of victims. Gang’s still in the game The Babuk ransomware group became known at the beginning of the year but the gang says that their attacks had started in mid-October 2020, targeting companies across the world and demanding ransoms typically between $60,000 and $85,000 in bitcoin cryptocurrency. In some cases, victims were asked hundreds of thousands for data decryption. One of their most publicized victims is the Washinton DC’s Metropolitan Police Department (MPD). This attack likely pushed the threat actor into announcing its retirement from the ransomware business only to adopt another extortion model that did not include encryption....
Post a Comment
Read more

Microsoft Teams Phishing Attack Targets Office 365 Users

  Up to 50,000 Office 365 users are being targeted by a phishing campaign that purports to notify them of a “missed chat” from Microsoft Teams. Researchers are warning of a phishing campaign that pretends to be an automated message from Microsoft Teams. In reality, the attack aims to steal Office 365 recipients’ login credentials. Teams is Microsoft’s popular collaboration tool, which has particularly risen in popularity among remote workforces during the pandemic  — making it an attractive brand for attackers to impersonate. This particular campaign was sent to between 15,000 to 50,000 Office 365 users, according to researchers with Abnormal Security on Thursday. “Because Microsoft Teams is an instant-messaging service, recipients of this notification might be more apt to click on it so that they can respond quickly to whatever message they think they may have missed based on the notification,” said researchers in a Thursday analysis . The initial phishing email displays the name ...
Post a Comment
Read more