Monday, July 15, 2024

Facebook’s WhatsApp Bet Pays Off

When Facebook bought WhatsApp for $19 billion nearly a decade ago, Mark Zuckerberg made a promise: The Facebook chief said he wouldn’t meddle often with the messaging app so as not to mess with a good thing.
Mr. Zuckerberg stuck to that philosophy as WhatsApp amassed more than two billion users globally — until 2019, when he began tapping the app’s growth and business potential.
Now WhatsApp has become increasingly crucial to Meta, the company that owns Facebook, Instagram, and other apps.
More than half of Americans ages 18 to 35 who own a cellphone have installed WhatsApp, according to the company’s studies, making it one of Meta’s fastest-growing services in its most mature market. Ads on WhatsApp and its sister messaging service, Messenger, are also growing so rapidly that they may reach $10 billion in revenue this year, the company recently said.
“If you’re envisioning what will be the private social platform of the future, starting from scratch, I think it would basically look like WhatsApp,” Mr. Zuckerberg, 39, said in a recent interview.
WhatsApp’s momentum is a reminder that Meta remains at heart a business powered by its family of social apps. Although Mr. Zuckerberg has spent billions of dollars in recent years on his future-facing vision of the immersive digital world of the metaverse and on artificial intelligence, apps like WhatsApp are bringing in new users and revenue. That makes it one of the keys to his company’s future, enabling Meta to explore costly, experimental and unproven products.
WhatsApp has also become a backbone of Meta’s business in what Mr. Zuckerberg has declared to be “a year of efficiency.” After global economic uncertainty last year caused an advertising slump, Meta cut nearly a third of its staff. It remains reliant on its core apps to deliver steady sales growth and to appeal to Wall Street.
In the interview, Mr. Zuckerberg positioned WhatsApp as a “next chapter” for his company. The messaging app could become a cornerstone for business messaging, he said, as well as a primary conversation app.
“Now that everyone has mobile phones and are basically producing content and messaging all day long, I think you can do something that’s a lot better and more intimate than just a feed of all your friends,” he said.
A decade ago, WhatsApp was a very different app — by design. Jan Koum and Brian Acton, two engineers who had worked together at Yahoo, built WhatsApp as a fast, free and secure way to exchange messages with friends and family.
Importantly, WhatsApp used a data connection instead of mobile carriers’ SMS messages, which often cost money. The service also didn’t store people’s messages on its servers. And it didn’t have some bells and whistles that other apps, like iMessage, do, which allowed it to run quickly and easily on even slow data connections.

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