The ambitions of WhatsApp have remained something of a mystery, even as its reach as a messaging service and as the social media platform of choice for Africans has grown and grown. It has done so without a very obvious business plan and we’d often wondered why.
Then, after the departure of co-founders Brian Action (September) and Jan Koum (April) from parent Facebook, there has been some great reporting (paywall) on the internal tensions over how a desire to protect users’ privacy clashed with the goal of commercializing WhatsApp to justify the $22 billion Facebook paid for it in 2014.
WhatsApp’s competitive advantage is in emerging markets, where its service almost always works, regardless of internet speed or available bandwidth. It’s the world’s No.1 messaging service, thanks to users from Latin America to Africa and most of Asia outside China.
In these regions, there’s intense interest from local businesses that want to see WhatsApp commercialize—they want to be able to use the platform more efficiently to transact with their customers who pretty much live on WhatsApp.
Facebook understands that. “The wave of disruption we’ll see from Africa will come from small companies more so than from big corporates,” Julien Decot, Facebook’s director of platform partnerships for EMEA, said at the MEST Africa Summit in Cape Town, South Africa last week.
“It’s clear those companies will probably jump directly to WhatsApp to connect to their prospective customers and get their businesses discovered. It’s unclear if they’ll advertise on Facebook’s Newsfeed.”
That doesn’t mean Facebook thinks African or Asian businesses will never advertise on WhatsApp. It’s just taking a step-by-step approach. The first move: creating a WhatsApp Business app for millions of small businesses to reach their customers.
The next: “fixing the plumbing” by enabling key services like payments and discovery and then identifying the “underlying business model,” Decot explains.
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