In the recently held DLD conference in Munich, WhatsApp founder Jan Koum announced WhatsApp will henceforth be free to all its users. The practice of charging every user a yearly fee of 99 cents after completing their free of use first year has been shelved now.
WhatsApp has a user base of a billion now.
Mr. Koum admitted that this nominal fee was not working well with the platform and hence decided to abandon it. WhatsApp has a user base of a billion now. It will be interesting to wait and watch how this app is planning to generate revenues in future.
Here’s what WhatsApp is saying about that, according to a company blog post:
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.
There is one more obvious reason for WhatsApp to abandon charging it users. The statistical study of this popular app shows that it is popular in countries like South Africa, Argentina, Brazil, India, Mexico etc. It is estimated that more than 60 to 70% of mobile internet users in these countries are active users of WhatsApp.
Starting this year, Whatsapp will test tools that allow you to use WhatsApp to communicate with businesses and organizations that a user want to hear from.
WhatsApp captured such enormous users in countries like India because it provided its users a cheap, viable and seamless communication system over the internet. Notably, a good amount of these users do not have a credit card or any other viable method for making the payment of 99 cents to WhatsApp.
This situation would have disconnected a huge number of users automatically diluting its database and perhaps giving an unwanted negative publicity to WhatsApp.
The real reason behind WhatsApp’s decision to scrap its annual fee is thus obvious. Now, before long, we shall see how WhatsApp is planning to compensate the losses by tapping a billion of its users for revenue generation.