According to public financial reports, Whatsapp has lost quite a bit of money in the third quarter of this year. Facebook seemingly acquired the communications service for a whopping USD$16 billion recently because the social media tycoon thought the company was worth that much. Facebook may have been wrong.
Whatsapp has lost a crazy amount of USD$138 million. This loss is due to mismanagement of funds and a huge chunk was lost due to stock-based compensation, which comes from paying out stock to its employees. The company only took USD$10 million in revenue!
The tiny profit made might be caused by the low subscription fee of USD$1 a year or some users not paying anything at all to use the service. There are no ads either. But that’s exactly why the app is so popular isn’t it? It’s like a lose-lose situation. You don’t charge, you make little money. You charge, you lose consumers!
For your information as well, the break down of Facebook’s acquisition of Whatsapp is also now available. The social media company paid US$488 million for the brand, US$288 for its technology, and US$15.3 billion for its “goodwill” value. I wonder if the company feels like the money was well spent this time.
Source: Low Yat