By in Business

How do companies that offer free services earn money?

Hello,

I am back after a long period of inactivity. I have been busy with work, my website and some other stuff. However, I missed writing here.

I've been thinking about companies that offer free services, like WhatsApp, and how they afford running such free business. I thought this should be my topic of today.

I know services like Viber and Skype have an option to purchase credit, others may display ads on their apps or websites to earn revenue from ad views, but what does WhatsApp have? How are free text messages or calls generating any income for them? How do they keep their business running? Is there another method that they could be using to earn money other than the two I mentioned above?

The same can be said about free email services like hotmail (before they started displaying ads and integrating other paid services like Xbox). Other than having large number of free users, what did they get? Or do such companies only aim at building audience at first before they make their service profitable?

I am really interested in hearing your opinion.

Thanks in advance


You will need an account to comment - feel free to register or login.

Comments

agvulpes wrote on July 11, 2015, 9:49 AM

I think most companies do have what is called a Premium Service which they charge for ! From memory Hotmail was purchased by Microsoft who just recently turned it into Outlook !

RonElFran wrote on July 11, 2015, 1:54 PM

In 2014 Facebook acquired WhatsApp for $19 billion. Whatever their business model is, it seems to be working brilliantly!

Shadi wrote on July 11, 2015, 6:59 PM

Oh I thought Hotmail was always Microsoft's

Shadi wrote on July 11, 2015, 7:02 PM

They must be having something good in return for paying that much

agvulpes wrote on July 11, 2015, 9:10 PM

They purchased Hotmail in 1997 ! if you are interested in their other purchases/merges : https://en.wikipedia.org/wiki/List_of_mergers_and_acquisitions_by_Microsoft

Paulie wrote on July 11, 2015, 11:46 PM

Websites that offer free online language courses make their money in different ways. Alison.com for example makes you pay if you want to receive a certificate showing that you have completed its course. Other online sites like LearnCantonese will give you a few very basic lessons and then demand payment for all of the materials that are needed to successfully complete a course of study.

cheri wrote on July 14, 2015, 6:21 AM

I do not know anything about this. In fact I thought you have the answer because of your title. : )