Billions use WhatsApp, but it makes little money—that’s about to change

In February, Facebook-owned WhatsApp surpassed 2 billion users. A global pandemic and countless stay-at-home orders later, that number has only grown.

Zoom may have been the communications startup darling of the pandemic, but WhatsApp has quietly shattered some impressive milestones. At a peak in April, the messaging service was exchanging more than 100 billion messages a day. Users spent 15 billion minutes talking between voice and video calls. WhatsApp is Facebook’s fastest growing property—yet it makes very little in the way of revenue. (Facebook does not break out precise figures for its various business segments.)

The user base is in place, however, and those inside the company feel WhatsApp is now poised to capitalize.

“It turns out that people would much prefer to contact businesses via messaging them than they would through the traditional channels of calling a 1-800 number and waiting on hold or going to a website and filling out a form,” said Will Cathcart, head of WhatsApp, during a panel on Tuesday at Fortune’s virtual Brainstorm Tech conference.

Cathcart pointed to WhatsApp’s development of an application programming interface for large businesses, from which the company currently generates revenue. “It’s great for business because it’s way more efficient. The [return on investment] is much higher on customer support activity or commerce activity,” he said.

WhatsApp is also looking toward advertising as a source of revenue, similar to Facebook’s strategy with Messenger and Instagram. “But instead of the advertisement pointing to a website, point it to a WhatsApp thread,” Cathcart said. “So, say, ‘Here’s what I’m selling. If you’d like to learn more, message me.’ People prefer that. It’s a much easier user experience. Businesses prefer that because the sales close better.”

The company eventually hopes to expand the presence of advertising even more, Cathcart said, with the addition of ads in the app’s “Status” tab—similar to Instagram Stories. And just this week, Facebook announced the $1 billion acquisition of Kustomer, the customer relationship management platform, with the aim of providing more tools for businesses.

“The vision we have here is that if you are someone who uses WhatsApp, and you want to reach a business, you should be able to do it over WhatsApp,” Cathcart said. “Doing that means we have to give businesses tools that help them organize their customer services operations and plug into WhatsApp.”