In 2014, Meta*, when it was known as Facebook, acquired WhatsApp for an incredible $19 billion. At the time, it was one of the most expensive deals among tech giants. Mark Zuckerberg himself said that for him this is one of the most ambitious acquisitions. But after 8 years, the bet doesn’t seem to have worked, as the app still fails to generate enough returns for investors.
WhatsApp was created in 2009 by former Yahoo employees Brian Actom and Jan Koum. As a result, the startup turned into the most popular messaging app. By 2013, WhatsApp had over 400 million unique users. However, soon after the service was acquired by Mark Zuckerberg’s company, many users switched to Telegram and Line. Pavel Durov’s messenger received 8 million new users. WhatsApp currently has 2 billion users.
Despite the huge reach of the audience, the messenger did not bring serious profits, and Facebook (Meta) was unable to monetize WhatsApp, fearing to lose a significant part of the user base. The quarterly report is due on July 27, and Mark Zuckerberg will have a hard time explaining the current situation to investors. Especially as competing apps like WeChat are doing well financially with even fewer users.
Given Meta’s fiduciary obligations to the company’s shareholders, Zuckerberg may have to introduce a subscription/paid service to WhatsApp or eventually sell the service.
* Meta is a company recognized as extremist in Russia.
Source: Trash Box
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
