When Facebook Inc.’s Mark Zuckerberg agreed to pay a staggering $19 billion for WhatsApp Inc. in February 2014, his justification was simple: The messaging service was expected to reach 1 billion users and become essential for a sizable slice of the world population.
Zuckerberg got what he paid for. WhatsApp has more than doubled in users since Facebook bought it and on Monday hit the 1 billion milestone he was so certain about. But the company has only just started thinking about the next step: making money.
WhatsApp, which ended up costing $22 billion because of Facebook’s stock price at the time the deal closed, had $10.2 million in revenue the year before it was acquired, according to regulatory filings. That revenue came mostly from charging 99 cents for subscriptions after a user’s first year -- a fee Facebook discontinued in January.
The company still is experimenting with how to make money from the app, Facebook Chief Financial Officer David Wehner said last week. Facebook has plenty of time to figure it out -- the company last week reported sales gained 52 percent to $5.8 billion in the fourth quarter, beating analysts’ estimates and sending the stock to a record. More than 1.59 billion users log into Facebook every month.
Zuckerberg gave some hints about the plans for WhatsApp in an earnings call with investors. The messaging app may seek to make money from discussions between people and businesses, he said. WhatsApp has long eschewed the idea of profiting from advertising or games like other popular apps.
“Our mission has never changed,” the company said Monday in a blog post. “WhatsApp began as a simple idea: ensuring that anyone could stay in touch with family and friends anywhere on the planet, without costs or gimmicks standing in the way.”