Facebook has decided to back off of adding advertising to WhatsApp. Facebook purchased WhatsApp in 2014 for $22 billion dollars and has grown the platform to 1.5 billion global users. But despite the impressive user base, WhatsApp has never turned a profit the WSJ reports.
WhatsApp which focuses on end-to-end user encryption has no way to really monetize. Facebook recently added a commercial version of WhatsApp for businesses to try and help the app start earning money. Facebook has said to be focusing on building out pay to use features for business communications.
WhatsApp was originally making money by charging a download fee and then a $0.99 annual subscription. Facebook in an effort to grow the platform made WhatsApp free after its acquisition. Many feel Facebook made the platform free in an effort to run ads in the future. Those people were right as Facebook unveiled plans in 2018 to generate revenue from selling ads in its Status feature, which allows ephemeral postings similar to Instagram’s Stories.
Facebook is reportedly shelving plans to show ads in WhatsApp messenger as Facebook CEO Mark Zuckerberg announced plans last year to shift away from public posts in favor of a more private secure platforms like WeChat or Telegram. What many believe is Facebook is now discovering, bringing ads to an encrypted service comes with challenges.
Making the Facebooks platforms more secure is possibly going to happen do to all the privacy concerns over the platform and the start of the Libra project. The Libra project is a blockchain digital currency proposed by Facebook in 2019 with the launch planned in 2020.