Facebook Presses WhatsApp On Sales -- WSJ
August 02 2018 - 3:02AM
Dow Jones News
By Deepa Seetharaman
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 2, 2018).
Four years after Facebook Inc. bought WhatsApp for $22 billion,
it is formally starting the messaging app on a new mission:
bringing in revenue.
WhatsApp on Wednesday detailed plans to sell advertisements and
charge big companies that use its service to interact with
customers, launching its first major revenue streams as growth at
Facebook's main app is starting to decelerate.
The measures are aimed at connecting businesses with WhatsApp's
user base of roughly 1.5 billion accounts, WhatsApp executives
said.
The announcements follow disagreements between Facebook leaders
and WhatsApp's co-founders, Jan Koum and Brian Acton, over how to
monetize the popular, free service. Mr. Koum and Mr. Acton resisted
efforts to put ads in WhatsApp, and over the past year both men
have decided to leave Facebook and the messaging app they started
in 2009 -- a breakup that was the subject of a Page One article in
The Wall Street Journal in June.
Facebook last week said its long-rapid revenue growth is slowing
as adding new users becomes more difficult for the 14-year-old
company, sending its stock price tumbling nearly 20% in two days
before it recovered slightly this week. To compensate, Facebook is
relying more on its acquisitions, including photo-sharing app
Instagram, to help drive growth.
WhatsApp users exchange an average of 60 billion messages a day,
but only a fraction are between companies and consumers -- in part
because the system isn't designed to facilitate that kind of
interaction, executives said.
"Right now, there's really no way to know if a business is
reachable on WhatsApp," Matt Idema, WhatsApp's chief operating
officer, said in an interview.
The company will introduce new ad types to let users know they
can text companies directly via WhatsApp for any customer-service
queries instead of calling. WhatsApp will charge companies between
a half a penny and 9 cents -- depending on the country -- for every
message delivered to a potential customer, a spokesman said.
About 100 companies have been testing the feature, including
Singapore Airlines Ltd., e-commerce company Wish and ride-sharing
company Uber Technologies Inc., WhatsApp said.
Uber said it has been using WhatsApp to answer drivers'
questions in Mexico, India and Brazil.
The messages between people and business will be encrypted and
unreadable by WhatsApp, but the companies could potentially store
those messages in a decrypted state, creating a pool of potentially
useful data for those clients.
WhatsApp also will start showing ads in its popular Status
feature next year, following a path carved out by Instagram,
company officials told the Journal.
Status allows users to post montages of text, photos and video
that appear for 24 hours -- similar to an Instagram tool called
Stories. About 450 million people use WhatsApp Status, compared
with about 400 million who use Instagram Stories, which already
shows ads.
Like with Stories, the ads in Status will be powered by
Facebook's advertising system. Mr. Idema said these types of ads
would help familiarize users with business on WhatsApp. "We've seen
it working well on Instagram and so we're learning a lot from
that," he said.
Users will be able to choose whether to opt into receiving
messages from businesses. WhatsApp executives believe users will
adapt to the new tools, a spokesman said, adding that the company
has seen positive feedback from ads in Instagram Stories.
Write to Deepa Seetharaman at Deepa.Seetharaman@wsj.com
(END) Dow Jones Newswires
August 02, 2018 02:47 ET (06:47 GMT)
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