The world’s most popular messaging app, WhatsApp, is making a key shift in its strategy.
WhatsApp dropped its service fees entirely, to become a free app with effect from yesterday (18). And much like Facebook Messenger, the other Facebook-owned chat app, it will also start experimenting with chat bots and other services that rely on a “conversational” user interface.
The company used to give users a free year of service, and then charge 99 cents annually. Its original reason for charging users was to keep the user experience ad-free. Now, WhatsApp says it’s sticking with an ad-free model even though it’s no longer charging users for the privilege.
That leaves WhatsApp with no apparent way to monetise its 900 million monthly active users. One argument is that it doesn’t necessarily have to: it’s owned by Facebook, after all. But the more likely path to revenue is contained in the second half of its announcement: WhatsApp says it’ll start experimenting with tools that let businesses connect to customers. In a statement, the company gave the example of using WhatsApp to contact your bank about a fraudulent transaction, or pinging your airline to check on a flight delay.
Executing those sorts of data-intensive queries means WhatsApp is going to look a lot more like Facebook Messenger, which has been overhauled this year to become an interactive platform where users can order an Uber or avail themselves of a digital assistant called M.
Messaging apps account for 91% of all time spent on mobiles and desktops by US users, according to ComScore. And since users are spending all their time in chat apps, that’s where companies want to be.
David Marcus, who runs Messenger, has called chat threads “the new apps,” signaling social networks’ focus on offering new services. WhatsApp users are already using their platform in creative ways: Political parties in Tanzania use it to spin messages during election campaigns, while a reformist minister in Indonesia is actually using it as a bureaucratic tool.
Tech companies are also embracing chat bots. Slack, the messaging app for businesses, announced an $80 million fund to support development of third-party bots on its platform. Chinese messaging app WeChat has long allowed its 650 million users perform a variety of tasks, from paying bills to buying movie tickets, from within the app. Even companies that aren’t messaging platforms rely on a “conversational” user interface to provide services to their customers: Startups like Magic and Fin use a chat-like experience between users and bots to book a helicopter ride or find a restaurant.
WhatsApp’s move towards being a free app suggests it’ll have a better chance to grow and retain users. At 900 million users, it’s the world’s most-used messenger, but Facebook Messenger is closing in, surpassing 800 million users in Dec. 2015. Facebook Messenger has also grown incredibly quickly, adding 300 million users in the last 13 months.
WhatsApp added a similar number of users between Sept. 2014 and Sept. 2015–but it hasn’t gained traction in the US, where it has less than six times the number of users compared to Messenger. A WhatsApp unencumbered by subscription fees might drive growth in the US and prevent existing users from switching to a free option come renewal time.