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Monetizing WhatsApp

When Facebook purchased WhatsApp for $19 billion in stock in 2014 (which eventually ended up costing $22 billion), all everyone wanted to know was how it would contribute.

As of February this year, WhatsApp had 1 billion monthly active users on its chat service. However, WhatsApp isn’t as simple when it comes to advertising.

CEO Mark Zuckerberg & Co. have done a great – no, flawless – job at pulling (and acquiring) future growth levers, but pulling them at the right time. Instead of buying WhatsApp and Instagram and cramming ads down users’ throats from day one, they carefully dialed that growth in. This gives investors growth today and growth tomorrow.

So far, it’s working. And that’s exactly what the company appears to be doing with WhatsApp, as the service will now share user data with Facebook. This can help with companies looking to chat or interact with its customers.

Cited examples: “Whether it’s hearing from your bank about a potentially fraudulent transaction, or getting notified by an airline about a delayed flight, many of us get this information elsewhere, including in text messages and phone calls.”

Assuming Facebook can monetize WhatsApp and Oculus Rift, it should set up investors for years of future growth.