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Andrew F. B. Lash

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How do Messaging Apps make money?


We all use messaging apps with smartphones nowadays. They have rapidly replaced traditional communication like telephones and paid messaging through SMS. The main reason for such shift is the fact that all messaging apps are free. Free installation, free calls, free texting. So have you ever wondered: How do these apps make money? Why did Facebook buy WhatsApp for $19 billion in 2014?

Of course messaging apps have their own ways to make money using the daily high traffic and interaction in the apps. Here are some of the most common ways they gain profits. And don't forget to find out more Messaging Apps Android

 

 
The “freemium” model

While it’s true that most apps don’t require payment to use,  not all features are free. Viber sells “stickers”, which feature cartoon characters, to their users for $.99. It seems a small amount, but it adds up because of the huge user volume.

Some apps like WhatsApp charge their customers a small subscription fee after the first year of use. Again, the fee is so insignificant to one individual, but it’s the high number of users that generates a strong revenue stream to the app provider.

Besides, WhatsApp and Skype are both providing exclusive service for businesses, in which the formers represent internal online communicators of the latter. This is a smart move as more and more companies have such demand and willing to pay a larger amount for the service. 
 
Advertising

Another monetization approach is to build in-app advertising. Basically, advertisers pay messaging apps to display their ads. This is a win-win situation. Advertisers can catch the attention of millions of users in the app. If users are fine with it, no more discussion. If they are not happy seeing pop-up ads while they talk with friends, they can pay the providers money to block the ads.

Either way, money flows into the pocket of the intermediary – messaging app providers. This approach is utilized by several apps already, like Viber, Snapchat, or KakaoTalk.

 
 
The Ecosystem

Some Sms apps for android have gone much further than just a messaging app. They even build an ecosystem for integrating distinct features so that it’s more convenient to their users. In this way, more interaction is created and more money is earned.

Take WeChat for example. This is the dominant app in China today. It’s hard to come by any Chinese that doesn’t have a WeChat account. The app was developed by the local Internet giant, Tencent Holdings. It started like every normal communicating app: free calls and messaging.

But it didn’t end there. Soon WeChat developed into a platform that allows users to do almost everything: from sharing on social media, following celebrities, ordering food, booking tickets, paying bills, to getting coupons. You can find anything you need there, basically. And the app itself milks money both from the providers and the users. 

 

 
All in all, these are just the basic ways for messaging apps to monetize. They indeed have dozens of different approaches to make money, using the huge traffic volume, so don't be surprise when looking at their revenue figures. For more funs, we would like to suggest top 4 Secure free messaging apps for teenagers