Facebook earned over $60 billion last year. But it could add another $10 billion almost overnight. One of the vastly under-reported story over the last 12 months is the almost unprecedented growth of WhatsApp. I’m not sure we’ve ever seen anything like it in the history of mobile. We’ve seen apps like Pokémon Go blast off from zero to a half a billion installs in mere months. We’ve seen social entertainment platforms like TikTok acquire 614 million new users incredibly quickly.
But have we ever seen already-mature billion-user-plus social platforms gain 760 million new users in a single year? Shockingly, that’s exactly what WhatsApp did in 2019.
I don’t think we’ve seen that before. That makes WhatsApp Facebook’s fastest-growth platform.
And, its greatest opportunity.
Because WhatsApp is almost completely unmonetized right now, according to mobile expert Eric Seufert, who runs MobileDevMemo.
WhatsApp is an incredibly important virgin field for Facebook. It can start selling inventory directly or integrate audience network there and very nearly instantly will into existence billions of dollars worth of revenue per quarter.
Facebook’s average revenue per user was over $7 in the company’s most recent financials. While it’s lower in Asia Pacific, where WhatsApp is strongest, an analysis from 2017 suggests that WhatsApp could add between $5 and $10 billion to Facebook revenue.
It’s also before we’ve seen the potential for what WhatsApp might really become: something approaching what WeChat is in China, an uber-app that manages massive portions of people’s commerce as well as communications.
Much of the growth has been fueled by India, and that’s where we see the greatest impact.
WhatsApp is the WeChat of India.
The Indian “monopoly” factor has driven a lot of WhatsApp’s growth, says entrepreneur Subhodip Dutta. It’s the “epicenter” of marketing, spam, political campaigns, he added … in addition to being the primary place people use to communicate.
WhatsApp is big in India, for sure. But not just in India. My friends in the Caribbean use it significantly. Colleagues on the east coast of the United States have started asking to WhatsApp instead of messaging with Messenger. And it’s big in Africa, with tens of millions of downloads recently in Egypt, Nigeria, South Africa, and other countries on the continent, according to Apptopia.
“No ads, [and] minimal bandwidth hit makes it popular with professional connections in Africa,” says Jerome Lengkeek, president of Urban Matters and former president of Fourth Watch African Investments. “On the same note, the quality of calls is much better with weak internet connections than Skype.”
So why has Facebook left WhatsApp almost entirely unmonetized, beside some minor efforts to connect businesses and consumers on the platform?
One theory: Facebook is waiting for a rainy day.
When, inevitably, growth stalls in North America and Europe.
“Facebook seems to be waiting strategically to monetize WhatsApp: possibly because it wants to use WhatsApp revenue to buoy its stock price when the Big Blue App and Instagram revenue growth stalls in high-ARPU (average revenue per user) markets again,” says Seufert.
Another theory is that the value is already baked into Facebook’s stock price, and it’s more valuable as a possibility than a reality, Seufert adds.
Which, of course, gives Facebook more time and less pressure to figure out ways of harvesting golden eggs from WhatsApp without killing the goose. The company just backed off plans to fit ads into WhatsApp, according to recent reports from the Wall Street Journal and The Verge, and that might be a good idea.
One commonality in answers to my queries on WhatsApp?
People really like the lack of ads.
“My mother has old relatives in Pakistan and they all chat together on WhatsApp,” says entrepreneur Miguel Ali. “Before it, other apps did the same, but you were either bombarded with horrific amounts of ads (that slowed down your device) or you had to continually buy ‘credits’ which made it undesirable.”
Which means that Facebook’s plan to not stuff the app with ads is probably good. And that Facebook will redouble its efforts to integrate payments and commerce into communication in WhatsApp.
That might be challenging in India:
India hasn’t yet allowed the most innovative wallet function of WhatsApp there, yet.
India has a strong technology industry of its own, and isn’t looking to be digitally colonized by American tech giants, as Amazon’s Jeff Bezos learned this past week. And there are local competitors like PhonePe, who are aggressive and well-funded.
Over time, however, you have to think that Facebook will figure out how to turn over a billion users into cash.
It is, after all, what the company is best at.
I forecast and analyze trends affecting the mobile ecosystem. I’ve been a journalist, analyst, and corporate executive, and have chronicled the rise of the mobile economy. I built the VB Insight research team at VentureBeat and managed teams creating software for partners like Intel and Disney. In addition, I’ve led technical teams, built social sites and mobile apps, and consulted on mobile, social, and IoT. In 2014, I was named to Folio’s top 100 of the media industry’s “most innovative entrepreneurs and market shaker-uppers.” I live in Vancouver, Canada with my family, where I coach baseball and hockey, though not at the same time.