Will Facebook monetize its non-core businesses anytime soon? (Part 5 of 6)
Facebook continues its investment in WhatsApp
In the previous part of this series, we discussed Facebook’s (FB) Messenger service and why the company is pumping resources into making it successful even though Facebook acquired WhatsApp for $19 billion earlier this year.
During the company’s conference call to announce its second quarter earnings, Facebook’s management explained that it would continue to ramp up investments in WhatsApp through 2015. This shows Facebook’s confidence about WhatsApp’s potential.
WhatsApp currently has about 500 million monthly active users. Facebook could start monetizing WhatsApp’s strong user base either through advertising or subscription. But it remains to be seen what strategy Facebook will have for WhatsApp.
WhatsApp’s growth has been tremendous
WhatsApp competes with apps like Line and Tencent’s (TCEHY) WeChat in the mobile messaging industry. But WhatsApp is the global leader and it’s quite popular—especially in Europe, Latin America, and Asia.
The above chart shows that during the first four years of its operation, the number of users on WhatsApp grew faster than comparable networks like Facebook, Google’s (GOOGL) Gmail, Twitter (TWTR), and Microsoft’s (MSFT) Skype. By the end of its fourth year, WhatsApp had 419 million monthly active users. Meanwhile, Facebook had 145 million, Gmail had 123 million, Twitter had 54 million, and Skype had 52 million.
Facebook expects its WhatsApp investment to benefit the company over the long term
During the conference call, Facebook’s management commented, “So things like Messenger and WhatsApp over time, when that closes and Instagram, I really do just want to emphasize that there is a lot of work to set up the foundation for having a good business community and ecosystem and in those that we think it’s going to be years of work before those are huge businesses for us. And I’m liking where we are now on something like the Messenger, to where we were on Facebook in like 2006 or 2007, where it was primarily consumer product at that time where you really only communicated with friends.”
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