Whatsapp is Free

Whatsapp, the popular messaging service owned by Facebook, announced that it will drop its $1 annual subscription fee, and instead make money on helping build business relationships between consumers and companies. This strategy is identical to Facebook’s evolution of Messenger, which now incorporates customer service capabilites, mobile payments, and other non-chat services. Whatsapp founder Jan Koum noted that the company will double down on its transition into something akin to a messaging platform, rather than just a chat app:

Starting this year, we will test tools that allow you to use WhatsApp to communicate with businesses and organizations that you want to hear from. That could mean communicating with your bank about whether a recent transaction was fraudulent, or with an airline about a delayed flight. We all get these messages elsewhere today – through text messages and phone calls – so we want to test new tools to make this easier to do on WhatsApp, while still giving you an experience without third-party ads and spam.

As I’ve noted in previous posts, it’s clear that the next stage of messaging is for American incumbents (Facebook Messenger, Whatsapp, Instagram DM, Twitter DM, and so on) to adopt the platform features that Asian equivalents (Kik, Line, WeChat, etc) have had for years. And as I wrote three weeks ago, more and more of localized e-commerce takes place within the Facebook ecosystem:

Facebook Messenger and Whatsapp have become the default way to communicate with potential sellers and vendors. Perhaps the only time I used my phone’s call feature was to flag down a handyman looking for my address. Granted, people texted plenty in 2010. But the prevalence of constantly-updated Facebook  groups and messaging apps has created a more connected marketplace with no barriers to entry for sellers and greater price transparency for buyers.

Whatsapp’s recent announcement spells the start of the formalization of the ad hoc communications I used above. Much like Amazon’s push into home installation services, Facebook is seeking to own, or be involved in, as much of the buying process as possible. And with Whatsapp dropping its fee and pivoting toward consumer services, Facebook is one step closer to that goal.