It’s been almost a decade since Facebook (NASDAQ:META) founder Mark Zuckerberg shocked the tech world, announcing his company’s agreement to spend $19 billion on WhatsApp, a popular messaging app with a tiny business.
Since then, WhatsApp has remained somewhat of an anachronism. Usage has continued to grow, with more than 2 billion people now counting on the app to chat with friends and family, up from 450 million at the time of the acquisition. But it’s still not much of a moneymaker.
Unlike Instagram, which Facebook bought in 2012 for the much tidier sum of roughly $1 billion, WhatsApp doesn’t show ads, which is Zuckerberg’s core business. It’s also unrelated to his company’s hugely expensive pivot to the metaverse or its effort to catch up to TikTok with its short video product, Reels.
But the company now known as Meta has no intention of sidelining WhatsApp. Rather, Zuckerberg regularly touts the value of the asset and its potential to expand, boasting on Meta’s latest earnings call about the 200 million people who use the WhatsApp Business app, which helps companies communicate with clients. He told media outlets in June 2022 that WhatsApp represents the “next chapter” for Meta.
To parlay its massive user base into a product that contributes in a big way to the bottom line, WhatsApp needs more large businesses across the globe to rely on the service as a main way to converse with customers.
For each conversation, companies pay in the range of a half-cent to 15 cents.
META shares gained $1.11 at the opening bell on Friday to $297.00.
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