UPDATED 14:52 EDT / AUGUST 01 2018

APPS

Facebook moves to make money from WhatsApp with Business API and Status ads

After acquiring WhatsApp for $22 billion in 2014, Facebook Inc. did away with the messaging app’s $1 annual membership fee. The social network is now launching a push to make money from the app once again, and on a bigger scale. 

Facebook today introduced two new paid offerings aimed at companies that use WhatsApp Business. It’s a version of the app that provides tools for firms to interact with their customers, with a particular emphasis on small businesses.

Facebook is now looking to work with larger organizations as well. Business API, the first new offering, enables companies to connect WhatsApp with external customer support services such as Zendesk to process inquiries. A clothing brand, for example, might use the feature to let its representatives field questions about a new fashion line without having to open the app.

Business API can be integrated with other types of services as well to push programmatic messages. The service is designed for sending appointment reminders, shipping confirmations for e-commerce purchases and other nonpromotional content.

Facebook will only let businesses contact a consumer who has messaged them first. The social network’s monetization strategy is to charge a fee for responses sent with a delay of more than 24 hours. The idea is presumably to encourage businesses to reply to consumers in a more timely manner, which could give WhatsApp an edge over other customer support platforms.

Facebook is keeping other important aspects of the user experience in mind as well. “With this approach, you will continue to have full control over the messages you receive,” the company wrote in a blog post. “Businesses will pay to send certain messages so they are selective and your chats don’t get cluttered. In addition, messages will remain end-to-end encrypted and you can block any business with the tap of a button.”

Business API is joined by a new ad type that will enable users to launch a WhatsApp chat with a business directly from an advertisement. Facebook plans to roll out the format to the news feed in coming weeks and, starting next year, to WhatsApp as well. The ads are set to appear in the app’s Status feature, a Snapchat Stories clone that boasts 450 million users.

WhatsApp has some 1.5 billion users in total. Given its massive reach, the app may have the potential to turn into a sizable revenue source for Facebook, especially if the social network adds yet more monetization channels.

The company could certainly use the extra income. Facebook’s shares tanked 18 percent last week, wiping $120 million off its market value, after it posted disappointing second-quarter earnings and a relatively gloomy projection for future revenue. WhatsApp may just emerge as a core part of the social network’s plan for regaining its lost momentum.

Facebook’s monetization push has already yielded some early results. The company claims that Business API is being adopted by more than 90 “large businesses,” including Uber Technologies Inc. and Singapore Airlines Ltd.

Photo: Facebook

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