WhatsApp drops annual subscription fee

PanARMENIAN.Net - WhatsApp founder Jan Koum announced that the company is dropping the service’s annual subscription fee in an effort to remove the barriers some users faced in using the service, Re/code reports.

“It really doesn’t work that well,” Koum said Monday, Jan 18, speaking at the DLD conference in Munich.

He noted that while a buck a year might not sound like much, access to credit cards is not ubiquitous. “We just don’t want people to think at some point their communication to the world will be cut off.”

Until now WhatsApp has been free for the first year and 99 cents for additional years. (It will stop charging subscription fees immediately but it will likely be a few weeks to fully take the payments infrastructure out of all versions of the app.)

As far as a new business model, WhatsApp says it will explore ways businesses can use the service to connect with individuals, but said the goal is to avoid spam and unwanted advertising.

According to Re/code, Koum said businesses are already finding ways to use WhatsApp to reach customers, but said the company could make this a lot easier. He said that the company wants to experiment with different approaches but added that “We haven’t written a single line of code yet.”

On Facebook’s second quarter earnings call last year, CEO Mark Zuckerberg likened the approach on WhatsApp and Messenger to what Facebook did in 2006 and 2007 while some were calling for it to move to banner ads.

“What we decided was that over the long term, the ads and monetization would perform better if there was an organic interaction between people using the product and businesses,” he said. “So instead of focusing on ads first, what we did was we built pages, and we made that free, that way as many businesses as possible could get into the network.”

Then it built analytics and finally it added the business opportunity on top of that and Zuckerberg suggested the same would be true for the messaging products.

“The long term bet is that by enabling people to have good organic interactions with businesses, that will end up being a massive multiplier on the value of the monetization down the road when we work on that and really focus on that in a bigger way,” he said. “So we’d ask for some patience on this to do this correctly, and the game plan will be more similar to what we did in Facebook with News Feed.”