WhatsApp Business Fuels Meta’s Growth

Key Takeaways

WhatsApp for Business is becoming a vital source of revenue for Meta beyond advertising.

The increase in private content sharing supports Meta's strategy to monetize direct messages across its apps.

A decade after buying WhatsApp, Meta is finally seeing substantial returns from the platform.

Meta recently shared impressive growth in non-advertising revenue, largely driven by WhatsApp’s steady rise in popularity among businesses and customers.

Back in 2014, Meta took a significant leap, spending $16 billion to acquire WhatsApp. Now, this once-bold purchase is proving to be a wise investment, as WhatsApp continues to show its true potential for Meta.

During Meta’s latest Q3 earnings report, the company revealed that WhatsApp is playing a leading role in a 48% year-over-year increase in non-advertising revenue. WhatsApp’s business messaging service, which allows companies to communicate with both loyal and potential customers through a subscription, is the main driver behind this growth. The trend began gaining momentum back in the third quarter of 2022 and has only accelerated.

Though non-advertising revenue stands at $434 million, it’s still a fraction compared to the $39.9 billion Meta earned from ads. However, the steady growth of this income stream signals promising potential for expansion.

Facebook executive Tom Alison pointed out that there’s been a sharp increase in private, direct messaging, or “private sharing.” Alison reported a striking 100% year-over-year rise in content shared over direct messages, indicating users’ shift toward more personal interactions.

Shift to Messaging-Based Platforms

Mark Mahaney, a senior tech analyst at Evercore ISI, highlighted messaging as Meta’s “most interesting under-monetized asset.” He’s been tracking how Meta monetizes direct messaging on WhatsApp, Messenger, and Instagram Direct for years. In addition to ads, Meta generates revenue through “click-to-message” features, which allow interested users to connect with businesses through a DM. This feature works across Messenger, Instagram, and WhatsApp.

As Meta begins to explore the potential of generative AI, there may be even more growth opportunities in messaging. Instagram’s head, Adam Mosseri, has also commented on this shift, saying, “More and more sharing is going to move from feed-based formats to messaging-based formats.”

For Meta, the challenge will be finding the best ways to boost growth and profitability in messaging, especially as each platform attracts different user demographics and behaviors. The question now is how Meta will tailor each app’s messaging experience to maximize engagement and revenue.