WhatsApp was always a Free app to download and use for one year, and then users had to pay $1/Year for using, At least for Android. iOS users had to Pay $1 even for Downloading it.
This is because the developers believed in offering an Ad Free experience to its users.
But when Facebook bought it, it made the app Free to use, for everyone. And you never have to pay ever.
So, how does Facebook makes money from WhatsApp?
It doesn’t, well not directly.
But you gotta pay the bills, right?
Facebook earns enough to pay the bills, even when it is in Million of Dollars.
And in return, it just needs a small favour from WhatsApp, that is, spying on its users’ messages and tell Facebook what they are talking about so that they can let Advertiser’s target them on its other Platforms where Ads have become acceptable.
WhatsApp doesn’t really spy on your messages individually but collects the data that is used by Facebook to help their Advertisers target people more accurately making them comfortable in spending more Facebook Ads, resulting in more revenue for Facebook.
WhatsApp mentioned this in its Privacy Policy when they updated it several months ago. You can also opt out of it if you want, an option which was later added after a lot of criticism by its users. Read more here.
I’ve written about how it uses data from your private conversations and shows you better Ads on Instagram and Facebook as all these Products are own by Facebook itself.
Read: How Facebook Uses your WhatsApp Conversations to Show you Ads