Forget about Metaverse: Zuckerberg is betting on WhatsApp as Meta's growth engine

Forget about the Metaverse, Mark Zuckerberg is betting on WhatsApp as the "next chapter" of Meta. “Now that everyone has mobile phones and is basically producing content and messaging all day long, I think you can do something that’s a lot better and more intimate than just a feed of all your friends”, said the founder and CEO of the tech giant in an interview with the New York Times.

Meta (back then still Facebook) acquired WhatsApp in 2014 in a deal worth $21.8 billion. In the years that followed, Meta allowed the app to run with almost no intervention on its part. However, after the retirement of founder Jan Koum in 2018, Mark Zuckerberg began to increase Meta's direction and daily involvement in the application to establish it as a new revenue engine. This involved integrating tools such as WhatsApp for business and advertisements. In the past year, the usage of WhatsApp has reached a critical mass in the US, with Metadata indicating that it is installed on the phones of approximately half of the 18 to 35-year-olds in the country. Simultaneously, Meta's revenues from advertisements on WhatsApp and Messenger are projected to reach $10 billion this year, with significant potential for further growth.

Now, in the backdrop of disappointing financial performance throughout most of 2022 and the beginning of 2023, along with criticism from investors regarding the substantial investments in the Metaverse vision, Mark Zuckerberg is shifting his focus to WhatsApp as the company's next growth engine. “If you’re envisioning what will be the private social platform of the future, starting from scratch, I think it would basically look like WhatsApp,” told Zuckerberg to the New York Times.

Zuckerberg can achieve this, in part, thanks to the strong growth of WhatsApp in the US, which happens to be Meta's most lucrative market in recent times. According to internal company data, WhatsApp has experienced the fastest growth among young people in Miami, New York, Los Angeles, and Seattle. This growth is attributed to WhatsApp-like features such as temporary messages and stories.

Simultaneously, the application manages to attract numerous businesses and brands. Companies like Chevrolet, Lenovo, Samsung, and L'Oreal utilize various capabilities of WhatsApp for business to maintain contact with customers. Moreover, companies such as Amazon and Uber leverage the advertising capabilities that connect Facebook and WhatsApp. These advertisements are displayed on the social network, and clicking on them takes the user to a conversation with the advertiser on WhatsApp. This strategy is used to expand their activities in Latin America and India.

The car manufacturer Nissan provides an impressive example of how businesses successfully leverage WhatsApp. In the past year, the company invested in the development of chatbots for WhatsApp, which direct consumers in Brazil to local sales agents. These chatbots account for 30% to 40% of new Nissan leads in the country and have reduced the average response time from 30 minutes to seconds.

Will Cathcart. Head of WhatsApp at Meta said that the company aims to make WhatsApp a household name in every household, whether in the context of messaging, shopping or catching up on the news. “The conversation has moved from ‘WhatsApp is the app I use outside the U.S. when I travel,’” he said. “It’s becoming significantly more mainstream.”