Why Meta and Mark Zuckerberg are betting big on Whatsapp for business

WhatsApp is already widely popular with U.S. consumers. Now Meta Platforms is turning more attention to building its small business base.

The Facebook parent company launched WhatsApp Business in 2018 with free, simple tools to help small businesses keep in touch with customers, offering a way for them to directly interact, search for products and indicate purchasing interest. 

Soon the company will roll out a premium service to small businesses, and it’s doubling down on a newer advertising format called “click-to-message,” which allows consumers to click on a company’s ad within Facebook or Instagram and directly start a conversation with that business on Messenger, Instagram or WhatsApp.

These initiatives offer Meta the ability to boost advertising revenue, stay relevant with small businesses and gain incremental revenue from the premium services offered, analysts said.

Keeping more inside the Meta universe

Meta (then Facebook) bought WhatsApp in October 2014 for around $22 billion. Since then, industry watchers have been watching closely for signs the company plans to monetize the platform more. That time could now be coming.

“If I stay on any of the Meta properties and I’m communicating using Meta, asking questions, and buying — all within the platform — there is no signal loss, and it’s easier for Meta to tell the brand its return-on-advertising spend,” said Mark Kelley, managing director and senior equity research analyst at Stifel. “Signal loss is really what’s been impacting social media companies this year.”

WhatsApp will be the “next chapter” in the company’s history, Meta CEO Mark Zuckerberg recently told CNBC’s Jim Cramer. He noted that the company’s “playbook over time” has been to build services to serve a wide audience and “scale the monetization” after reaching that goal. “And we’ve done that with Facebook and Instagram. WhatsApp is really going to be the next chapter, with business messaging and commerce being a big thing there,” he said.

This messaging from Meta comes at a time of transition for the company and uncertainty among investors. The company recently reported an earnings and revenue miss and forecast a second straight quarter of declining sales. Meta Platforms shares have lost roughly half their value this year. Mark Zuckerberg is betting large sums of money, currently at a loss, on a future in which the metaverse will be a growth driver for the company. But with his bet on the metaverse as far as a decade out before coming to fruition, the Meta CEO has stressed that in the short-term it is WhatsApp that is among the initiatives to focus on for growth.

WhatsApp Business has two components. There’s the WhatsApp Business app for small businesses. There’s also the WhatsApp Business platform, an API, for larger…