WhatsApp: A True Hegemon

dhruvtalksstech
Dec 25, 2022
6 min read

If you have been reading my blogs for a while now, you would know how I feel about Meta, Mark Zuckerberg, and Instagram. But for me, Meta's most consequential platform is WhatsApp and not Instagram or Facebook. WhatsApp powers the lives of close to 2.5 billion people. That's 31% of the world's population using a single messaging platform to communicate. WhatsApp is not monetized. It brought in a meager $8.7 billion in revenue in 2021. This is a chump change for Meta. Compare that to Instagram which has "only" 1.5 billion users and brought in over $21 billion in just ad revenue. Facebook brought in a staggering $120 billion in 2021 alone. Monetarily speaking, WhatsApp is not a very good business venture. But is a central piece of Meta's master plan to dominate the world.

There are 500 million WhatsApp users in India which is 84% of all smartphone users in India. India has the largest user base on WhatsApp, Facebook, and Instagram. Over 15 million businesses use WhatsApp business in India. India never had a huge "text" culture. Although people have iPhones and Androids, they prefer using WhatsApp over anything to communicate. Even iOS users barely use iMessage in India. One reason behind this is that 95% of smartphone users in India have an Android phone. It becomes inconvenient for iPhone users to use two different platforms for messaging when they can just choose the one that enjoys a wide support base. WhatsApp is essential on every phone and is considered indispensable. It is almost a given that anybody with a smartphone in India would have a WhatsApp account. It is extensively used by schools and all kinds of institutions alike.

WhatsApp does not have a robust revenue system in place. WhatsApp earned just 57 lakhs ($68,000) in profit from India. WhatsApp is only able to earn a few lakhs by charging WhatsApp business users a fixed fee if they do not respond to queries about the business within 24 hours of receiving the message. They also receive a small cut every time a user makes a payment using WhatsApp pay as a convenience fee. There are also mechanisms in place to have WhatsApp business users pay a certain fee after 1000 conversations but they are not well-implemented and people have found several ways to circumvent the system which hurts the revenue model.

Facebook acquired WhatsApp for $19 billion but the return on investment has been terrible. Facebook has considered displaying ads but has decided against it. The original founders of WhatsApp hated ads and just wanted to focus on providing a great, seamless experience to instantly message. Meta needs to figure out an innovative way to monetize the app without losing out on the users. Even losing a handful of users is bad for businesses because the messaging business is like a huge pile of dominos. If one of the falls, the rest follow. WhatsApp is currently fed by profits generated from Facebook and Instagram. There are several other challenges plaguing WhatsApp - increasing competition from Signal, privacy policy concerns, lack of entertainment and features, stagnation in the number of users, and increasing negative perception of how the data is handled and sold.

Every time WhatsApp goes down, millions of users download Signal. Its user base has sky-rocketed by 4200% as people are irritated with the frequent outages. Convenience is WhatsApp's single biggest selling point. If it is not able to deliver on that, then people will understandably make the switch. Signal has about 40 million monthly users but that number is rapidly increasing. Signal was founded by the founders of WhatsApp who left Meta after increasing disagreements with Mark Zuckerberg about the functioning of the app and the direction it should take to sustain itself. The privacy policy introduced by WhatsApp in 2021 caused a stir all across the country and even got the Indian Parliament and Supreme Court involved.

In a nutshell, the privacy policy stated that all of a user's data such as profile picture, phone number, status, and interactions with the app could be shared with subsidiaries of Meta (Facebook and Instagram) without requiring any user consent. People were given some time to accept the new policy or their accounts would be suspended failing to accept the updated terms of use. This caused outrage across the whole country and people left WhatsApp for Signal in droves. Signal is operated by a non-profit but WhatsApp is owned by Meta and that is why people trusted the former more. Signal also offers better privacy and data security by offering end-to-end encryption for all types of data and even the metadata of the encrypted data is not trackable. People did not accept the policy for a long time and WhatsApp had to push forward the deadline to accept the updated terms of use.

WhatsApp's India leadership was called to testify in front of the Parliament and there were several court hearings and high-profile investigations and subpoenas. Meta's platforms had already been battling worldwide resistance to user data collection and accusations of spying and all of this just added fuel to the fire that was threatening to burn 500 million people and in turn, Meta's profit and revenue. WhatsApp has been advertising very heavily ever since the privacy policy change to revitalize its image as a secure messaging platform. It has worked and the advertisements were followed by a slew of new general and privacy features. It can be easily said that out of all the 3 platforms, Meta is working the most on WhatsApp and the results are pretty apparent and promising.

WhatsApp chats have been end-to-end encrypted for a very long time but the backups were not until a few months back because of which people often had their chats leaked including Bollywood celebrities. In order to prevent this, the backups were also made end-to-end encrypted which I feel is WhatsApp's most consequential and welcome move ever in its entire history under Meta. WhatsApp has also got a visual makeover in the past 2 years with a lot of little refinements and improved stability. New features such as polls and more emojis are thoroughly enjoyed by people. I also especially like privacy features that allow hiding profile pictures, status, and about from certain people from the contacts list. It is very helpful and a step in the right direction. Support for more people in groups and on group calls is also much appreciated. WhatsApp also seems to have improved the video quality for video calls which is imperative in the post-Covid world.

WhatsApp is also trying to accelerate the adoption of WhatsApp business among small and medium business owners. The introduction of abilities to make payments and share locations, larger files, videos, and photos also makes it convenient for people. They have taken huge strides in WhatsApp web and have certainly improved substantially. It is still not perfect and there is a lot of room for improvement but is way better than before. The introduction of 'reactions' eliminated the need to respond to every text with a text. It makes the UI cleaner and is reminiscent of Instagram which teens absolutely love. The ability to leave groups without notifying anyone but the admin makes it easier to leave groups without having that awkward feeling. WhatsApp has also expanded the broadcasts and communities system with the introduction of "announcements" groups which serve the purpose of just making announcements by the admin and the members are not able to see the other members and the number of people in the group.

I am genuinely impressed by WhatsApp and its effort to become a better version of itself while focusing heavily on user privacy. That is not something I say very often about any Meta platform or social media app. I really hope we see such steps being taken for Instagram and Facebook as well. Who knows that maybe an increased emphasis on privacy will prompt female users to join back the platform which has been struggling with content moderation, fake news, and extremism. No matter how much we complain about WhatsApp, it has truly revolutionized the world and has provided a new breath of life to millions of people in the developing and underdeveloped world. It has brought the world closer, for the better.