Brief:

• WhatsApp, the Facebook-owned messaging app with 1.3 billion users worldwide, released an Android app aimed at helping small businesses connect with customers, per a blog post by the company.
• While some companies already use WhatsApp to chat with customers, the business accounts offer a distinct way to let businesses set up a profile page and automatic greetings and see statistics about their messaging habits, especially for companies that receive high volumes of messages from customers.
• The app is now free to download from Google Play in Indonesia, Italy, Mexico the U.K. and the U.S, and will roll out worldwide in the coming weeks.

Insight:

The new standalone app brings WhatsApp, a free service used by more than 1 billion people worldwide, closer to making money for Facebook as part of the company's broader plan to generate revenue by charging large enterprises for advanced communication tools. It also follows on the heels of Facebook's announcement that its core platform's News Feed algorithm will start to diminish the visibility of posts shared by brands and media in favor of personal content. Both WhatsApp and Facebook's other chat service, Messenger, might be being positioned by the social giant as bigger hubs for brands to reach consumers as those same companies' engagement shrinks on Facebook itself.  

By splitting off business chat functions from WhatsApp, Facebook is repeating the steps it took in 2014 to make Messenger a standalone app outside the flagship social networking site. The separate app could give brands another channel to communicate with their customers, especially younger generations who often prefer chat apps over phone calls with customer service.

WhatsApp has a massive user base, mainly outside the U.S., and Facebook has mostly respected the aspirations of WhatsApp co-founders to avoid cluttering the app with ads, games and other features to maintain its functional, simple interface. Facebook purchased WhatsApp in 2014 for $19 billion to grow its already sizeable user base. Originally, the app was free to download, and then cost subscribers $0.99 a year. That fee was dropped in 2016, leaving the app without any source of revenue. Facebook is gradually exploring ways to monetize the platform by adding business profiles to let users connect with companies through the app and enable direct payments — initially in India, its largest market.

The news also comes as Facebook is continuously expanding the messaging features of its main platforms — Facebook, Messenger, Instagram and WhatsApp — in various ways to keep people engaged with more functionalities. The strategy is similar to Chinese apps such as Tencent's WeChat, which has a wider range of features including payments, ride-hailing, travel booking and reviews. Facebook has updated its platforms with a greater emphasis on messaging, with more tools for both users and marketers, including introducing display ads in July on Messenger and a "messages objective" in Facebook Ad Manager in September.