Facebook is going to make investors keep waiting to see the money from Messenger and WhatsApp
The company announced new milestones for both products earlier this year, with Messenger hitting 700 million monthly active users and WhatsApp cruising to 900 million.
On the call, one analyst asked about Facebook's strategy for monetizing WhatsApp, now that it's nearing 1 billion users.
"I don't think that there's a particular 'magical number' that you hit with a billion users," CFO Dave Wehner replied on the call.
Facebook wants to continue driving user growth and building products that are useful and engaging, he said, "so the business side is not the main focus right now."
Moving the goal posts?
That attitude strays from what Facebook has suggested in the past though.
Back in 2014, CEO Mark Zuckerberg implied that 1 billion was kind of magical.
"Once we get to [reaching 1 billion people], then we think that they will start to become meaningful businesses in their own right," he said of products like Messenger, WhatsApp, and Instagram on Facebook's Q3 earnings call.
"I really think for each of those categories, the right strategy is to first focus on connecting 1 billion-plus people and reaching the full potential before very aggressively turning them into businesses," he continued.
No, Zuckerberg didn't say that once businesses hit a billion they should start making money immediately. And Instagram, for example, has started becoming a big revenue driver without a billion users (it has 400 million MAUs). But the number has become oft-quoted in analyst notes as a sort of landmark for when Facebook products could start trickling out some cash.
Although Wehner made it clear that Wall Street should continue to have patience, Zuckerberg did outline the general idea for the eventual monetization of its two chat apps down the line on the last earnings call.
Facebook will first make Messenger and WhatsApp a natural place for people to communicate with businesses, and then find ways to monetize those relationships.
"The long-term bet is that by enabling people to have good organic interactions with businesses, that will end up being a massive multiplier on the value of the monetization down the road, when we really work on that, and really focus on that in a bigger way," Zuckerberg said. "So we ask for some patience on this to do this correctly."
So, no, 1 billion users does not a revenue-driver make.