Many felt that Facebook overpaid to acquire the WhatsApp messaging service, but the current WhatsApp net worth suggests otherwise.
Investors valued WhatsApp at $1.5 billion in 2013. A year later, social media giants Facebook paid $19 billion to buy the popular chat service.
The deal was the second biggest tech takeover in history, despite the small fact that WhatsApp had failed to turn a profit since its 2009 release.
At the time, many felt that Facebook had paid too much. While the service was popular, there were few ways to monetise it without harming user experience. A $0.99 annual charge failed and Facebook thinks that ads would harm the ‘intimate nature’ of WhatsApp.
Yet, Mark Zuckerberg wouldn’t have parted with $4 billion in cash and $15 billion in stock if he didn’t feel that WhatsApp had the potential to make money.
WhatsApp still makes losses. However, Facebook’s Matt Idema has been named as the service’s COO. He is tasked with turning WhatsApp’s growing army of users into cash.
Will WhatsApp ever be profitable?
The task of monetising a messaging app is harder than most other tech ventures. However, similar apps, such as China’s WeChat and Japan’s Line prove that it is possible.
WeChat has been very successful. The popular service has added many new features, such as mobile games and price comparisons, which they use to make money.
However, WeChat’s biggest earner is its mobile payment system. This allows users to transfer money between each other and pay for goods. They now process more than $500 billion in payments each year, with a small charge applied when users remove money from their WeChat wallet.
However, WhatsApp are trying a different method. Instead, they plan to let companies contact users through the app. This would allow for real-time updates on things such as deliveries, delays or cancellations.
WhatsApp will need to expand its money-making operations if it is to generate a decent return on the purchase price. However, as the world’s second biggest social network, WhatsApp has the user base to become profitable.
Has the WhatsApp net worth increased?
While it seemed that Facebook had spent too much on WhatsApp, the tech company will be happy with their decision.
There is no way of telling the exact WhatsApp net worth, given that the app is now part of Facebook, Inc. (valued at $442.1 billion). However, when purchasing the service in 2013, Facebook based their $19 billion offer on the 450 million monthly users that the service had at the time. This meant that they paid $42.20 per user.
WhatsApp’s MAO base has since grown to 1.2 billion. If a user is still valued at $42, WhatsApp is currently worth $50.7 billion.
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