Facebook’s Acquisition of WhatsApp Points to Future Subscription Services for Communication

By Minal Bopaiah Perhaps you’ve heard that Facebook just bought WhatsApp for $19 billion. But did you know that WhatsApp, unlike most social media

By Minal Bopaiah

Perhaps you’ve heard that Facebook just bought WhatsApp for $19 billion. But did you know that WhatsApp, unlike most social media and teen-popular sites, has a paid subscription model?

For those of us unfamiliar with WhatsApp, the site and service offers mobile messaging across mobile device platforms without having to pay SMS fees. Thus, while WhatsApp is the #2 social messaging app on smartphones in the US, it’s often #1 in other countries, like Brazil and South Africa.

So in simple market domination terms, it makes sense for Facebook to purchase WhatsApp.

But what’s unusual about WhatsApp is that it’s basically a paid model with a free one-year trial. After the first year, users are asked to pay 99¢ a year.

That’s an infinitesimally small amount, and clearly not a revenue generator, but it does condition a worldwide audience on the notion of paying for mobile service. Which then opens the door for Facebook to charge for their messaging service in the future.

As devices become smaller and consumers look to cut the cord on cable fees, Internet-based subscription services are well-positioned to become the largest channel of telecommunications worldwide. And since consumers are more conditioned to pay for telecommunications than content, this may be brilliant on Facebook’s part.

And savvy content sites may want to consider partnering with newer means of telecommunications, just The Sun has with the UK’s #2 mobile carrier.

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