Market Overview

Facebook Reportedly Decides Against Placing Ads On WhatsApp

Facebook Reportedly Decides Against Placing Ads On WhatsApp

Facebook, Inc. (NASDAQ: FB) executives will return to the drawing board to search for new ways to monetize WhatsApp after scrapping plans to sell ads on the chat platform, The Wall Street Journal reported Thursday. 

WhatsApp Founders Balk At Ads 

Facebook acquired WhatsApp in 2014, and investors have been wondering since then how the company would monetize the platform used by more than 1.5 billion people. Selling ads seemed like a natural way to monetize the platform, but founders Jan Koum and Brian Acton were against this initiative and resigned from the company in protest.

Facebook is scrapping all plans to introduce ads on WhatsApp, the Journal reported Thursday, citing people familiar with the matter. 

The messaging company may have quietly put an end to a team tasked with finding the best way to integrate ads over the past few months, the sources said.

Facebook Relies On Advertising 

Advertising is extremely important to Facebook, as 98% of its revenue came from ad sales in the third quarter, according to WSJ. Undermonetizing assets like WhatsApp could become a source of friction among the shareholder base. After all, the company proved it can successfully monetize Instagram, and investors could push and demand more be done across all platforms.

What's Next For WhatsApp 

WhatsApp could monetize its large user base in other ways by focusing on monetizing business users who use the platform to chat with customers, a source told WSJ. WhatsApp could also be used by businesses in developing countries to display in-app product catalogs and other features.

WhatsApp is also testing payments and other projects in India, where the platform is very popular.

Facebook shares were down 0.29% at $221.12 at the time of publication Friday. 

Related Links:

Why Did Facebook 'Rebrand' Facebook?

Facebook Faces Lawsuit For Alleged Anticompetitive Conduct


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