On Monday, WhatsApp co-founder announced that the subscription fee associated with the service would be scrapped and it would now focus on exploring new ways that businesses can interact with the users of the mobile-messaging service in order to make up for the revenue that will be lost. Previously, the app had charged a renewal fee of $1 annually for all users once they had completed their first year. However, on Monday, Jan Koum, the service’s co-founder spoke at the Digital Life Design conference that the fees would be removed from the various versions of WhatsApp in the next few weeks because it isn’t very practical.
The move is a shift for WhatsApp and Facebook Inc., which purchased the messaging app in 2014. The booming subscriber growth of the messaging service, partly due to its ad-free model, was able to serve as a justification for the hefty $22 billion price that the social networking giant had paid for it. At the time of the deal, the number of WhatsApp users had been 450 million. Previously, Chief Executive and Facebook founder Mark Zuckerberg had stated that he expected the messaging service to make a contribution to the company’s bottom line, but not until it reaches the milestone of 1 billion users.
Mr. Koum stated on Monday that WhatsApp was reaching that milestone, but there was no specific deadline as to when it will begin generating revenue. No comment was made by a Facebook representative. During the conference, he said that the subscription fee was being abolished because it wasn’t working well in numerous countries and they didn’t want the users to be worried that their communications would be cut off. He also noted that a number of users didn’t have a debit or credit card that would be needed to pay for the service.
WhatsApp has been able to focus on building its product and promoting growth after its merger with Facebook Inc. instead of trying to make sure it earns money. Mr. Koum said that in the past two years, they hadn’t put a lot of time and effort into making the subscription model work. He further mentioned that they wanted to build something useful to people rather than worry about making money. According to him, this logic was also agreed upon by Facebook executives. According to ThePricer, another announcement that WhatsApp made is that this year, they would start testing new business models and organizations would be allowed to communicate with users with their consent.
The other mobile messaging service of the social media platform, Facebook Messenger is already using a similar facility, which enables businesses to get in touch with users. The whole point of this practice is to enable firms such as airlines to alert their customers about flight delays or other details and even banks for notifying their clients about fraudulent transactions. Mr. Koum said that this was still in its very early stages and it was yet to be seen how communication was made possible. He asserted that third-party spam or advertisements wouldn’t be introduced.