Mark Zuckerberg taps the strengths of WhatsApp
Meta exploring potential of its fastest growing platform
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.
Zuckerberg stuck to that philosophy as WhatsApp amassed more than 2 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 fastestgrowing services in its most mature market. Ads on Facebook and Instagram that push users to 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,” 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 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 such as 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 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, 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 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, such as iMessage, do, which allowed it to run quickly and easily on even slow data connections.
WhatsApp quickly took off, with hundreds of millions of people around the world downloading it in just a few years. That caught the attention of Zuckerberg, who snapped up WhatsApp in 2014 after it received overtures from Google and Chinese
internet company Tencent, two people familiar with the matter said.
Zuckerberg initially left most decisions about WhatsApp to its founders, who had stayed on after Facebook bought the app. Koum and Acton bristled at talk of making money and advertising, and put a priority on safety and security on the messaging service. In April 2016, WhatsApp rolled out end-to-end encryption, which keeps messages from being intercepted or viewed by parties outside the conversation.
“It felt like Facebook was keeping WhatsApp in its back pocket for a long time, as a kind of `green field' opportunity for monetization,” said Eric Seufert, an independent mobile analyst who follows Meta. “It has almost been more valuable for them as this unknown quantity, where they often said, `Who knows how big the business could be?'”
But by 2019, Zuckerberg was champing at the bit to assert more control over his company's apps, tying them together so they would share data and technology. That led to the departures of WhatsApp's founders and other employees. Acton joined a rival company, Signal; Koum now focuses on philanthropy and buying high-end, air-cooled Porsches. Some former WhatsApp executives later accused Zuckerberg of breaking promises he had made concerning privacy when he bought the company.
Zuckerberg has since built WhatsApp into a more fully fleshed-out messaging service and business. WhatsApp has added features, ranging from simple emoji reactions and message forwarding to disappearing messages and supporting the app across other devices, such as Macs and Windows desktop computers.
For most of its life, WhatsApp had been more popular with users outside the United States. But with the new features, more Americans began trying it. In the United States, it has grown fastest with 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 world's most used Stories product, Meta said.
WhatsApp also began offering paid tools and custom apps for businesses 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 business and advertising partnerships in Latin America and India with companies such as Amazon and Uber.
In 2017, WhatsApp introduced “click-to-message” advertising, which is an ad format that businesses can buy to place inside a Facebook feed. When users click on the ad on Facebook, it links them to a brand's WhatsApp account, where they can talk with customer service representatives or take an action such as booking a flight or buying goods. The ads have become Meta's fastestgrowing ad format, the company said.
Nissan spent the past year building chatbots on WhatsApp that can help the automaker talk with its customers in Brazil and route them to a local car dealership. Between 30% and 40% of Nissan's new sales leads 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 for Nissan Brazil, said in an interview. “This is about giving our salespeople the tools they need, because they actually want to sell.”
Nikila Srinivasan, a Meta vice president of product management, said the company was also building its payments infrastructure and working with companies in India, Brazil and Singapore to allow people to pay for purchases directly inside WhatsApp. More than 200 million businesses use WhatsApp's professional business apps, she said.
Still, WhatsApp is contending with competitors and regulatory hurdles. Its biggest rival is iMessage, Apple's native messaging app, which comes installed on every iPhone and Mac. It is also grappling with smaller but wellloved upstarts including Signal and Telegram, which is especially popular in Europe.
In Europe, WhatsApp may be forced to integrate with competing messaging services as part of the requirements under a new law, the Digital Markets Act, Seufert said. The company has said it has begun the difficult technical work of making sure that WhatsApp users can send messages to rival apps in the region.
Some regulators have also pushed against encryption, a key feature of WhatsApp and iMessage, saying it makes it more difficult for authorities to monitor or catch criminals.
Will Cathcart, head of WhatsApp, has 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 unveiled in September. Channels lets people follow status updates from influencers such as Bad Bunny, the musician who dropped a reference to WhatsApp in his track “Moscow Mule” last year, without divulging their phone number or contact information. WhatsApp now has more than 225 channels, including one for The New York Times, that each has more than 1 million followers.
The goal is to make WhatsApp a household name, whether it is to shop, chat or stay on top of news and events, Cathcart said.
“The conversation has moved from `WhatsApp is the app I use outside the U.S. when I travel,'” he said. “It's becoming significantly more mainstream.”