WhatsApp has revealed that it’s ditching its $1 yearly subscription fee in the coming weeks, according to founder Jan Koum, who made the announcement at DLD in Munich, Germany.
Acquired by Facebook for around $19 billion two years back, WhatsApp passed the 900 monthly active user (MAU) mark back in September. While some were concerned that Facebook would seek to monetize WhatsApp through advertising or other means, there has been no clear sign of where Facebook was heading with the messaging app. Indeed, WhatsApp has continued with the same business model it’s had since its inception — free for the first year, then a dollar each year thereafter.
However, according to Koum, this business model “really doesn’t work for some people.” He noted that some people don’t have credit cards, for example, while it’s also worth noting there are other messaging apps — such as Facebook Messenger, which passed 800 million MAUs this month, which are free to use.
Instead, Koum says the company will start experimenting on connecting companies with people. While he admitted they haven’t really settled on the final plan yet, it seems that they will focus on monetizing from big businesses using WhatsApp to carry out customer service — and perhaps even transactions — with consumers.
In effect, WhatsApp is becoming a platform, and by the sound of things it will be nearly identical to Facebook Messenger which is also moving towards becoming a platform. Facebook Messenger also eliminated the need for a Facebook account the previous year, letting those on mobile sign-up purely with their phone number — exactly like WhatsApp.