When Facebook bought WhatsApp For $19 billion almost a decade ago, Mark Zuckerberg made a promise: The Facebook boss said he wouldn’t meddle often in the messaging app so as not to mess with a good thing.
Zuckerberg stuck to that philosophy as WhatsApp amassed more than two billion users worldwide, until 2019, when he began taking advantage of the app’s growth and commercial potential.
Now WhatsApp has become increasingly crucial for Meta, the company that owns Facebook, Instagram and other apps. More than half of Americans ages 18 to 35 who own a cell phone have installed WhatsApp, according to company studies, making it one of Meta’s fastest-growing services in its most mature market. Ads on Facebook and Instagram that drive users to WhatsApp and its sister messaging service, Messenger, are also growing so quickly that they could reach $10 billion in revenue this year, the company recently said.
“If you’re imagining what the private social platform of the future will be, starting from scratch, I think it would basically look like WhatsApp,” Zuckerberg, 39, said in a recent interview.
WhatsApp’s push is a reminder that Meta is still at heart a company driven by its family of social apps. Although Zuckerberg has spent billions of dollars in recent years on his future vision of the immersive digital world of the metaverse and on artificial intelligence, applications like WhatsApp are generating new users and revenue. That makes it one of the keys to the future of his company, allowing Meta to explore expensive, experimental and unproven products.
WhatsApp has also become the backbone of Meta’s business in what Zuckerberg has declared to be “a year of efficiency.” After global economic uncertainty caused a drop in advertising last year, Meta cut nearly a third of its staff. It remains reliant on its core applications to generate consistent sales growth and appeal to Wall Street.
In the interview, Zuckerberg positioned WhatsApp as the “next chapter” of his company. The messaging app could become the cornerstone of enterprise messaging, he said, as well as a primary conversation app.
“Now that everyone has cell phones and basically produces content and sends messages all day long, I think you can do something much better and more intimate than just showing all your friends,” he said.
A decade ago, WhatsApp was a very different app, by design. Jan Koum and Brian Acton, two engineers who worked together at Yahoo, created WhatsApp as a fast, free, and secure way to exchange messages with friends and family.
Importantly, WhatsApp used a data connection instead of SMS messages from mobile operators, which often cost money. The service also did not store people’s messages on its servers. And it didn’t have some conveniences like other apps, like iMessage, allowing it to run quickly and easily even on slow data connections.
WhatsApp took off quickly and was downloaded by hundreds of millions of people around the world in just a few years. That caught the attention of Zuckerberg, who bought WhatsApp in 2014 after receiving overtures from Google and Chinese internet company Tencent, two people familiar with the matter said.
Initially, Zuckerberg left most decisions about WhatsApp to its founders, who stayed on after Facebook bought the app. Koum and Acton became angry when there was talk of making money and advertising, and prioritized the security of the courier service. In April 2016, WhatsApp implemented end-to-end encryption, which prevents messages from being intercepted or viewed by parties outside the conversation.
“It seemed as if Facebook had kept WhatsApp in its pocket for a long time, as a sort of ‘green field’ of opportunity for monetization,” said Eric Seufert, an independent mobile analyst who follows Meta. “For them it’s almost been more valuable as that unknown quantity, where they often said, ‘Who knows how big the business could be?’”
But in 2019, Zuckerberg was striving to exert greater control over his company’s applications, uniting them to share data and technology. That led to the departure of WhatsApp’s founders and other employees. Acton joined a rival company, Signal; Mr. Koum now focuses on philanthropy and buy high-end air-cooled Porsches. Some former WhatsApp executives later accused Zuckerberg of reneging on privacy promises he had made when he bought the company.
Zuckerberg has since built WhatsApp into a more comprehensive messaging service and business. WhatsApp has added more features, ranging from simple emoji reactions and message forwarding to disappearing messages and support for the app on other devices, such as Macs and Windows desktops.
For most of its existence, WhatsApp had been most popular among users outside the United States. But with the new features, more Americans began trying the app. In the United States, it has grown fastest among young people in Miami, New York, Los Angeles and Seattle, according to the company’s studies. A Snapchat-like feature that allows users to post temporary text, photo and video updates, called Status, has become the most used Stories product in the world, Meta said.
WhatsApp also started offering paid tools and custom apps for companies that wanted to use the platform to communicate with consumers. Chevrolet, Lenovo, Samsung and L’Oreal now use some of those tools, and WhatsApp has forged commercial and advertising partnerships in Latin America and India with companies like Amazon and Uber.
In 2017, WhatsApp introduced “click to message” advertising, which is an ad format that businesses can purchase to place within a Facebook feed. When users click the ad on Facebook, it links them to a brand’s WhatsApp account, where they can speak to customer service representatives or take an action like booking a flight or purchasing products. Ads have become the fastest growing advertising format on Meta, the company said.
Nissan spent last year creating chatbots on WhatsApp that can help the automaker talk to its customers in Brazil and direct them to a local car dealership. Between 30 and 40 percent of Nissan’s new sales opportunities in Brazil now come through WhatsApp, the auto company said, and the service has reduced its response time to customers to a matter of seconds from an average of 30 minutes.
“You’re not being intrusive because you’re willing to help customers at their own pace,” Mauricio Greco, marketing director at Nissan Brazil, said in an interview. “It’s about giving our sellers the tools they need, because they really want to sell.”
Nikila Srinivasan, vice president of product management at Meta, said the company was also building out its payments infrastructure and working with companies in India, Brazil and Singapore to allow people to pay for purchases directly within WhatsApp. More than 200 million businesses use WhatsApp’s professional business applications, she said.
Still, WhatsApp faces competitors and regulatory hurdles. Its biggest rival is iMessage, Apple’s native messaging app, which comes installed on all iPhones and Macs. It’s also dealing with smaller but much-loved companies like Signal and Telegram, which is especially popular in Europe.
In Europe, WhatsApp could be forced to integrate with competing messaging services as part of the requirements of a new law, the Digital Markets Act, Seufert said. The company has said it has the difficult technical work began to ensure that WhatsApp users can send messages to rival applications in the region.
Some regulators have also pushed against encryption, a key feature of WhatsApp and iMessage, saying it makes it harder for authorities to monitor or catch criminals.
Will Cathcart, head of WhatsApp, defended WhatsApp’s privacy controls and said he would fight “tooth and nail” against any country that wanted to weaken its encryption.
One sign of how WhatsApp is evolving is Channels, a feature that was unveiled in September. Channels allows people to follow status updates from influencers like Bad Bunny, the musician who dropped a WhatsApp reference in his songMoscow mule”last year, without disclosing his phone number or contact information. WhatsApp now has more than 225 channels, including one for The New York Times, each of which has more than a million followers.
The goal is to make WhatsApp a household name, whether for shopping, chatting or keeping up with news and events, Cathcart said.
“The conversation went from ‘WhatsApp is the app I use outside of the United States when I travel,’” he said. “It’s becoming significantly more common.”
