Dive Brief:

• WhatsApp, the Facebook-owned messaging platform with over 1 billion global users, announced in a blog post yesterday that it's building and testing new tools for companies to better communicate with their customers via its app.
• WhatsApp is introducing features like verified profiles for small businesses and allowing large companies like airlines or e-commerce sites to push useful notifications including flight times or delivery confirmations.
• The eventual goal of the new tools is to charge large companies using the premium features for an added revenue stream, Chief Operating Officer Matt Idema told The Wall Street Journal. As of now, the services are reported to be free for small- and medium-sized businesses.

Dive Insight:

Facebook acquired WhatsApp for $19 billion in 2014, providing a rich new base of global users to reach, but the platform has, to date, remained a bit a conundrum from a monetization standpoint. WhatsApp has resisted the types of advertising that have been the bread and butter of Facebook and its other properties for years, but the latest updates point to a new window of opportunity, where businesses and big-name brands are charged to leverage the platform as a customer service and information portal.

The success of this strategy is important to Facebook as ad load growth on its core service continues to stagnate. These tools are another sign that messaging services, which are incredibly popular as a means for young users to communicate, are a big piece of Facebook's future. Earlier this summer, Facebook started running ads between users' conversations in Messenger, its other popular messaging platform, in a move that took a page from how it monetizes photo-sharing app Instagram, which it bought for $1 billion in 2012. 

WhatsApp's Idema didn't rule out that the service could eventually show ads to users but told the Journal that the focus, for now, is on better connecting businesses and users. Last year, WhatsApp started sharing users' mobile data with Facebook, a step to improve Facebook's ad targeting and friend suggestions that also led to two privacy groups filing complaints with the Federal Trade Commission (FTC) along with drawing the ire of privacy regulators in the European Union.

In March, Facebook opened limited tests on allowing businesses to launch chats with users in WhatsApp. This, coupled with the two new tools announced yesterday, signals a clear shift in WhatsApp's strategy to focus more on businesses and expand its capabilities. So far, companies in Brazil, Europe, India and Indonesia, including KLM Royal Dutch Airlines, are testing the tools, the Journal said.