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Comment by rmsaksida | Hacker News Reader

> You can't complain "they're adding ads!" unless you have a credible solution for somehow bringing in billions of dollars otherwise, and the WhatsApp founders didn't

What about business features? Pretty much every business in my country advertises a Whatsapp number, from large companies to mom-and-pops. People contact them over Whatsapp to ask questions, make complaints, order stuff, everything. I can't believe Facebook is unable to monetize that.

It seems to me that Facebook is severely biased towards ads because they already have a platform and it's a market they obviously know well. That doesn't mean ads are the only way to make money.

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Every company I've worked for wants an official WhatsApp business API.

And apparently that's what they proposed to Sandberg, according to the article, but the financial projections were nowhere near what ads would bring.

Ha think about all of the surface area on Facebook employees faces/arms that you could tattoo advertising on. I wonder if they have considered the financial opportunity cost there?

It’s just a matter of time. ;)

I think they are already working in that direction I last checked. https://www.whatsapp.com/business/

I liked the business app especially for shortcuts, auto-replies and other stuffs. But yes, official APIs is deal-breaker.

NOTE: Many applications and websites somehow are already using custom APIs (or something). Ex. Airlines sending booking details as WhatsApp message, flight/bus status and so on.

Yes, the custom APIs exist but are very hacky.

I work for one of the largest travel groups, I'm actually working on flight notifications, and they don't want to go there - no idea how other airlines or travel groups do it.

They mention it in the article:

> None of the proposals were as lucrative as Facebook’s ad-based model. “Well, that doesn’t scale,” Ms. Sandberg told the WhatsApp executives of their proposals, according to a person familiar with the matter.

I think it's partly a self-selection problem, where the companies which use the service don't have enough revenue to contact their customers through dedicated channels. If you try to monetize this, then most companies just leave because those who could pay already have such channels to customers.

It's the same problem with offering users to pay for an ad and tracking free facebook. Those users who would pay for facebook are exactly the ones you want to show ads to, whereas the others are uninteresting revenue wise either way.

So they would have to set the price as high as the high-value ad-viewers are worth - I don't see why it wouldn't work.

> the companies which use the service don't have enough revenue to contact their customers through dedicated channels. If you try to monetize this, then most companies just leave because those who could pay already have such channels to customers

I'm not sure that's true about the companies which use Whatsapp. They are not using Whatsapp because they can't afford anything else. They're using it because the clients use it. In a large part of the world, everyone uses Whatsapp for everything. Companies go out of their way to support clients via Whatsapp - they even pay for shady unofficial APIs implemented by third parties.

A company unable to afford "Whatsapp Business" probably doesn't need it anyway. They can just continue using regular Whatsapp. No need to force them to use the paid version.

Some of the use cases for Whatsapp Business:

- Customer service.

- Product listings.

- Orders and delivery.

- Knowledge base.

- Notifications (flight status, tickets, etc).

- Promotions.

A lot of these would be attractive for large companies.

That doesn't scale nearly to the $20 billion they were bought at. Yelp, which has a similar business model to what you quoted, and is more essential to businesses than WhatsApp, only has a market cap of $3.6 billion.

I'm not sure you understand how popular Whatsapp is outside the US. No one in my country has heard of Yelp (201 million population). Everyone uses Whatsapp daily. Whatsapp has 1.5 billion active users.

Part of the problem is that such customers are not as valuable as U.S. customers :(

You see it on the ads side as well, ads to U.S. or European customers can pay 10 times as much as an ad to a Latin American.

Yeah, but if we're going by a business features monetization model, what would matter is the number of businesses that are signed up, not the number of users.

I agree. My point is that a large number of businesses are likely to sign up because the service has a large number of users.

Lotta smart people at Facebook, I imagine they've looked at this and have come to the conclusion that it's not lucrative as you think.

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