How Much Could WhatsApp Be Worth To Facebook Going Forward?

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Facebook (NASDAQ:FB) is likely to start substantially monetizing WhatsApp from 2019, and we expect Instagram and Whatsapp to contribute around 25% to Facebook’s valuation. Our base case scenario assumes that average revenue per user from WhatsApp will increase from around $1 in 2019 to around $6 by the end of our forecast period. A faster pace of growth in these revenues would make WhatsApp even more valuable to Facebook. WeChat – a similar messaging app in China – generates average revenue per user of $7, and if Whatsapp can generate a similar metric soon, it could add around $10 to $25 billion to Facebook’s valuation, depending on the pace of revenue growth.

Our interactive model analyzes the impact of WhatsApp’s revenues on Facebook’s valuation.

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WhatsApp is likely to be a key growth driver for Facebook in the long term. If it is able to follow the monetization model of WeChat, it can add significantly to Facebook’s valuation.

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