Shulou(Shulou.com)11/24 Report--

Beijing, Nov. 28 (Xinhua) Mark Zuckerberg, founder of the American social giant Facebook, has tasted the bitter fruit of his risky bet on meta-universe. He is in urgent need of a shot in the arm and has set his sights on Wechat.

Zuckerberg is seeing a growing sense of urgency within Facebook. In response to the company's slowing growth and constant criticism of Zuckerberg for betting on meta-universe, Facebook is trying to make the chat app WhatsApp a real money-making machine.

In 2014, Facebook (renamed Meta last year) bought WhatsApp for $22 billion. It is shocking for the company to spend so much money on a simple, free instant messaging app, even though its number of users has grown to 400 million in five years. By far, it's still Facebook's most expensive acquisition, and it still hasn't paid back.

Facebook listed WhatsApp's revenue as "other" revenue items in its earnings report. In the second quarter of this year, WhatsApp's revenue was relatively negligible, at $218 million, mainly from the paid messaging function on WhatsApp. Facebook's total revenue in the second quarter was nearly $29 billion, almost all of which came from digital advertising. Facebook's revenue fell 1% compared with last year, the first time the company has suffered a revenue decline.

With revenue and user growth slowing and its share price plummeting, the company is eager to capitalize on WhatsApp's long-untapped financial potential and may even turn it into a "super app" similar to China's Wechat.

"this is a huge challenge," said Matt Idema, who was promoted to vice president of business information at Meta last year. "the question is how to build a business on existing communications products."

Currently, Edma's answer to this question is to establish a "corporate communications" strategy: companies can use WhatsApp to chat with customers, advertise and provide services through text. He pointed out that in the early stages of the epidemic, when people around the world were forced to stay at home, they saw more people communicating with businesses on WhatsApp, which highlighted how high the use of WhatsApp was and how low the realization rate was.

Facebook wants to turn WhatsApp into a super app WhatsApp's biggest business right now is that advertisers pay to send messages to users with the help of their apps, known as "click to see messages" or "click to view WhatsApp ads". It is still advertising, but it is different from the form of advertising that it tried and eventually abandoned a few years ago.

Since acquiring WhatsApp, Facebook has been trying to figure out how to make money from WhatsApp, according to two former WhatsApp employees close to WhatsApp. The company is now reviving the move because it has become "urgent" to find revenue growth, according to people familiar with the matter.

"it's too late now." According to people familiar with the matter. He also revealed that WhatsApp could have introduced a fully integrated payment function years ago. "(if it had been launched at that time), it might already be making a lot of money."

Edma does not deny that it may have taken the company too long to make WhatsApp an important part of its financial structure. Driving the business to build the app has become "something we have to do," he said.

He said it was time to combine chat apps WhatsApp, Facebook Messenger and Instagram Messaging "as a communication strategy".

Learning Wechat's new features may bring WhatsApp closer to a super app, providing users with a way to communicate, shop, order and pay within the app. Although the word "super app" is often used to describe China's Wechat, it has become a "taboo word" on Facebook because it is too abstract to operate, according to people familiar with the matter.

Wechat, a natural model for other companies with super app ambitions, has become ubiquitous in China, with chatting, playing games, hailing cars and shopping. In 2019, Wechat said it had more than 1 billion daily active users. By contrast, Facebook said it had 2.8 billion daily active users for all its apps in June.

"Wechat has a lot to learn." Said Edma.

In August, WhatsApp established a partnership with car-hailing app Uber in India, its largest market. WhatsApp has 500 million users in India, and its users can now call Uber to take a taxi in the app. In the same month, WhatsApp announced a partnership with Indian retailer JioMart, claiming it was the first time the app offered an "end-to-end" shopping feature.

"one of the questions we have now is how to scale up faster." WhatsApp product director Ajit Valma (Ajit Varma) said.

WhatsApp's push for rapid growth has caused dissatisfaction among users. Many people complain on social media about using WhatsApp to contact their companies to send spam text messages and messages.

Still, WhatsApp wants to be big. Valma hopes that "every company in the world" will work with it, from carmakers to airlines to cable TV suppliers. But it still needs a payment tool to achieve these ambitions. At present, on WhatsApp, payments are mainly limited to individual-to-personal transfers.

The difference of Wechat although WhatsApp is inspired by Wechat, the development and business model of Wechat is very different from that of WhatsApp. Consultant and writer Kevin Simotta (Kevin Shimota) previously served as global head of collaboration and marketing for Wechat. He said Wechat didn't want to be a super app at first. All the features added by Wechat after creating the core chat function are for users to improve the application, not the enterprise. He added that Wechat had not thought about how to make itself useful to the company.

Simotta said Wechat founder Zhang Xiaolong has the final approval for all new features, and he has a simple test for any new features of Wechat: "do I like it?"

"he just wants to hear in a logical and simple way why new features can bring real value to people." Simotta said.

A few years ago, Wechat users used an average of 60 to 70 minutes a day. In Zhang Xiaolong's view, such a long time is a potential problem. Simotta said Zhang Xiaolong believes that the time users spend on an app does not "represent value". Zhang Xiaolong's motto is "A good product is to leave after use," said another former Wechat employee. "

Simotta revealed that although Tencent did not release details of Wechat's revenue, Wechat derives most of its revenue from games and related purchases, rather than from advertising. Although he thinks the super-app concept is "absolutely feasible" in the West, he is not sure whether Facebook will introduce it to the West.

While Facebook is not certain to turn WhatsApp into a super app, the company is openly devoting new energy and resources to WhatsApp.

In May, Facebook held its first conference devoted to instant messaging. Zuckerberg delivered a keynote speech and urged companies to use WhatsApp API. At the same time, a big marketing campaign for WhatsApp is under way. Executives have highlighted the business in the past two earnings calls.

Zuckerberg said in the first quarter that WhatsApp is a way for the company to manage "signal loss". "signal loss" refers to the loss of ad tracking and positioning due to Apple's privacy adjustments. Recently, Zuckerberg promoted WhatsApp as a more secure information platform than iMessage.

Mr Edma did not say whether Facebook's renewed eagerness to turn WhatsApp into a profitable business had anything to do with the company's slowing growth in other areas.

He believes that the number of companies using WhatsApp is "certainly not at its peak".

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