WhatsApp’s latest privacy notification has been a spectacular own goal for parent company Facebook. Spooked by what they assumed was a sudden encroachment on privacy, users have rushed to download rival apps. Yet the snafu need not derail Facebook’s plan to monetise messages.
What a difference a week makes. Dubai-based Telegram boasted that 25m people joined in the space of 72 hours after the WhatsApp notification. Signal, a privacy-focused messaging app created by a WhatsApp co-founder, topped Google and Apple app stores this week — boosted by Tesla boss Elon Musk’s Twitter post “Use Signal” to his 42m followers. Shares in Signal Advance, an unrelated US-listed company, rose more than 400 per cent as confused investors tried to capitalise on the shift.
If Facebook can convince users that changes do not mean that encrypted WhatsApp messages are being read, it should staunch the outflow. Besides, downloading a new app does not necessarily mean deleting the old one. WhatsApp reached 2bn monthly active users last year — 10 times the size of its user base in 2013. Its popularity has eclipsed parent company Facebook and its photo-sharing app Instagram in recent years. Worldwide, WhatsApp was the most downloaded app of 2019, with more than 850m downloads according to Sensor Tower.
The business is in a delicate position as Facebook tries to make it pay its way six years after acquisition. If WhatsApp’s 2bn users contributed the same average revenue per user as Facebook’s main business, it would have added $16bn to the company’s sales in the last quarter — though overlap between users is unknown.
This monetisation seems unlikely given user resistance to advertising on the app. WhatsApp Business, which lets companies talk to customers, was launched in 2018. Its biggest markets are Brazil and India — large regions but not the most profitable. In the last quarter, Facebook’s US average revenue per user was 10 times higher than Asia’s.
But paying for stickers and using messaging services to make purchases, while popular in Asia, remain unfamiliar territory in the US. WhatsApp’s latest mis-step is not fatal. But turning downloads into dollars would breathe new life into its parent.
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