Meta Bought WhatsApp for $19 Billion but Has Struggled to Monetize It - Here's How Zuckerberg Plans to Turn It Into a Cash Cow

Meta is currently grappling with a pressing need to explore new approaches for its messaging platform, WhatsApp, to achieve consistent and exponential revenue growth.

This urgency arises amid heavy criticism surrounding the company’s failed metaverse ecosystem and the controversial launch of Threads, a multi-blogging app associated with Instagram.

WhatsApp Revenue Statistics Is in a Doldrum Zone

Brian Acton and Jan Koum co-founded WhatsApp as a versatile and affordable alternative to costly calls and SMS services.

This social media messaging app allows users to upload contact information, text, and call friends and family who also have WhatsApp, all at no monetary cost.

Since its launch, WhatsApp has permeated software and app store ecosystems, including iPhones, androids, and desktops.

The app’s potential for rapid growth caught the attention of Facebook, a popular and larger communication application owned by billionaire tech tycoon Mark Zuckerberg.

As a result, WhatsApp was acquired for a staggering $19.3 billion in February 2014, marking the largest investment in a social media app.

As expected, WhatsApp experienced massive growth and emerged as a widely popular messaging application by 2015, reaching a remarkable 2.2 billion users worldwide in 2021.

According to Statista, a reputable data survey and analysis platform, the number of mobile app downloads between 2016 to 2022 reached approximately 255 billion.

Statista survey of the number of mobile app downloads worldwide from 2016 to 2022 (in billions)

Data and communication analysts believe WhatsApp’s earlier userbase record of over two billion active users in 2021 has contributed to the number of mobile applications downloaded due to its communication utility.

However, in Zuckerberg’s world, WhatsApp has been more of an earning void than a reliable money maker like Instagram, another messaging app acquired by Facebook in 2012.

The acquisition of Instagram for a then-record-breaking fee of $1 billion in 2012 proved to be one of the most successful tech acquisitions of all time.

The app’s incredible popularity along with its interlinking and synchronized advertisement scheme propelled Facebook to secure social media dominance for years.

Meanwhile, the stark reality of WhatsApp is its aimless contribution to Mark Zuckerberg’s ecosystem of app investment. This has become a major concern as a large chunk of $19.3 billion was allocated to acquire the platform.

The difference between Instagram and WhatsApp’s financial success couldn’t be more pronounced.

Despite its acquisition cost of just $1 billion, Instagram generated a massive $20 billion in revenue for Facebook in 2019, and its success continues to soar.

On the other hand, WhatsApp has an acquisition cost of approximately eighteen times that of Instagram in 2014 and has contributed meager revenue.

Eight years after its acquisition, WhatsApp is yet to transform into much of a profitable business. One of its biggest problems is that it doesn’t fit into any obvious existing revenue models. The app is streamlined with few places to put ads without angering its user base, making an advertising model nearly impossible to hold the app up on its own.

According to Statista Google Play Store data in June 2023, WhatsApp missed out on the top mobile applications with exponential revenues.

Statista Survey of the leading Android apps in the Google Play Store worldwide in June 2023, by revenue (in million U.S. dollars)

The list was headed by video streaming and social media platforms such as Disney+, with $70.59 million generated revenue through Google Play Store.

Meta’s Continuous Metaverse Downtrend Puts More Pressure on WhatsApp

In October 2021, Mark Zuckerberg rebranded Facebook as “Meta,” signaling a shift from being solely dedicated to social media apps to encompassing a broad spectrum of technology applications.

This brand transformation also marked Meta’s foray into the metaverse world, with Zuckerberg envisioning it as a hybrid of today’s online social experience.

The primary goal was to become an industry-leading platform for technology innovations and generate substantial revenues to make up for losses and other innovations shortcomings, such as WhatsApp.

However, the reverse has been the case so far. Meta’s Reality Labs, responsible for developing futuristic metaverse technologies, incurred a staggering operational loss of $13.72 billion in 2022.

This was largely due to failed augmented reality (AR) and virtual reality (VR) metaverse innovations, which resulted in an additional loss of $727 million in sales revenue.

On April 26, 2023, Meta published its first-quarter earnings report, revealing a Reality Labs unit operational loss of $3.99 billion.

The continuous decline in the company’s metaverse endeavors indicates the possibility of cutting off innovations that haven’t met expectations.

This poses a potential threat to the existence of WhatsApp and other projects within the company’s portfolio.

WhatsApp Business & Advertisement Can Be a Lifeline for Monetization

In 2018, WhatsApp Business, a separate app designed with the needs of businesses in mind, was introduced as a strategic move to make the messaging app more profitable while remaining user-friendly.

The platform empowers companies and entrepreneurs to create business profiles, engage in seamless conversations with potential customers, and build easily accessible product catalogs.

The app was designed as a productivity tool, enabling users to sell products directly on the platform without relying on third-party services.

Since its launch, there have been promising signs of potential growth, suggesting that substantial revenues may be on the horizon in the coming months.

According to Statista data, global users of WhatsApp Business have reached approximately 283.5 million, marking a 35% increase compared to 2021.

Meta whatsapp
Statista’s number of WhatsApp Business downloads worldwide from 2018 to 2022

The platform’s popularity among business apps can be attributed to numerous integrations tailored to their needs, such as automated chat messages and easy integration into business websites.

However, communication analysts believe the WhatsApp development team will create more revenue via its business models’ application programming interface (API).

There is also a high expectancy that the team will integrate artificial intelligence (AI) into its platform to act as a customer service software.

While such endeavors may not be without challenges, they are crucial in achieving the app’s potential to generate significant profits regularly.

In the coming months or even years, users can anticipate exciting features in the Business app that will help entrepreneurs and business personnel build a large customer base and boost sales.

This development could replicate the success of WeChat, where users can do almost anything an app can do, such as texting, ordering, purchasing, and making payments, all within a single app.

It is important to note that implementing such integrations would create a connected ecosystem, allowing users to link their WhatsApp accounts with other Meta applications, including the controversial Threads, Instagram, and Facebook.

While Threads has faced criticism recently for allegedly copying Twitter’s interface, merging with WhatsApp Business could pave the way for a new landscape for both apps.

This strategic connection has the potential to generate a large user base for both platforms and enable data synchronization.

Moreover, the possibility of creating advertisements that can run on multiple platforms, including Instagram and Facebook, may not be farfetched.

If Meta successfully incorporates all these technologies, adverts, and marketing integrations, it could solidify its position as the industry-leading tech and social media company in terms of revenue.

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