There had been buzz about this particular news for a while now which has today been confirmed via an official statement by Whatsapp founder Jan Koum at DLD Munich.
This is a pretty huge shift in their business model. Previously, however, Whatsapp was free for the first year of usage and from there on users were charged with 99 cents annually. Now they appear to be going completely free.
Whatsapp is insanely popular with over 900 million active monthly users. According to their founder, this new decision of removing the payment requisite could benefit them even more and help them expand. The decision has also been taken keeping in mind the population of developing countries where paying a $0.99 annual fee via card could be an added hassle.
This announcement, however, does raise a very valid question as to how Whatsapp will be monetized here on. Typically, Facebook makes money from its products by harvesting data and selling ads. But this approach won’t likely go well with the Whatsapp users and the company probably won’t take this decision considering the plethora of several other, equally good messaging apps.
According to Whatsapp, they will explore ways that let users communicate with businesses and other organizations for its future monetization but it’s still very early to say anything for sure. Here’s what they had to say:
“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.”
Furthermore, as is common nowadays, if you are not paying for it, you are the product with the new WhatsApp model. Some privacy-conscious individuals may fear data sharing with parent company Facebook. It will be interesting to see how this plays out in the coming months.
Nonetheless for now Whatsapp will definitely see a rise in their downloads internationally.
Image Source – TechnoBuzz
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