Sacrifice WhatsApp! In Shock Move, Mark Zuckerberg May Sell Off App
Mark Zuckerberg will probably wish he was hydrofoiling in Hawaii on Wednesday instead of revealing Meta Platforms Inc.'s second-quarter earnings. Analysts have curbed their estimates for the social giant, and Zuckerberg's own foreboding comments to staff suggest the numbers won't be good. He also will have to face a stark reality about the aimlessness of WhatsApp, his biggest investment to date.
Challenges abound across Zuckerberg's conglomerate. Instagram is mired in trying to copy ByteDance Inc.'s TikTok, with mixed success. Young people don't want to use Facebook, whose overall growth has slowed, and Apple Inc. is blocking advertisers on Facebook's app from targeting people.
But then there's WhatsApp. The little green app that never really went mainstream in the US is the most popular messaging service for most of the rest of the world. Approximately 2 billion people actively use WhatsApp, but in Zuckerberg's universe it has been more of a defensive ploy and earnings void than a money maker like Instagram.
The contrast couldn't be more stark: Zuckerberg bought Instagram for $1 billion in 2012 and the app contributed $20 billion to Facebook's revenue in 2019 alone. He bought WhatsApp for $19 billion in 2014, and it has contributed pennies by comparison.
It's astonishing that eight years after Zuckerberg made the acquisition, he has yet to turn WhatsApp into a remotely viable business. Founded in 2009, WhatsApp initially made money from a 99 cent annual subscription because its founders despised ads. After the sale, both eventually quit over how Meta was trying to monetize the app with advertising. But by 2020, Meta had backed away from that idea, and said it would try charging businesses to engage with customers
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