Meta Platforms Inc. to Generate Billions in Revenue from WhatsApp Updates Ads: A Bold Move into Monetization

Meta Platforms Inc. (NASDAQ:META) is making a bold move to monetize its popular messaging app, WhatsApp, which boasts a daily user base of approximately 1.5 billion. According to a recent note from Morgan Stanley, the company's latest initiative could add billions to its revenue over time. Morgan Stanley analysts believe that Meta will introduce "Status ads" within the Updates section of WhatsApp, which will not appear in private messages or calls. These ads will utilize the Updates tab's Status feature, which is similar to Instagram Stories. In addition to Status ads, Meta is also planning to add monetization tools in WhatsApp Channels, including Promoted Channels and Channel Subscriptions. The analysts estimate that the ads could generate $3 billion to $5 billion annually from this initiative, with a bull case scenario projecting revenue of over $6 billion. While 1.5 billion users is impressive, it's important to note that the majority (around 95%) of WhatsApp users are outside the U.S., and international monetization is typically lower. However, Morgan Stanley believes that Meta's ad infrastructure and user scale could support a business of "a ~$3bn–$5bn." The analysts' base scenarios assume that Updates represents a high single-digit percentage of WhatsApp usage, or around 2–4 minutes of user time daily, monetized at levels near Pinterest's international rates. The bull case envisions 12% of user time in Updates and monetization at Facebook's rates, supporting a path to $6 billion+ of annual revenue, which would add about 3% upside to Morgan Stanley's current Meta revenue model. "This is a helpful multi-year framework," the analysts said, emphasizing Meta's ability to convert platform scale and ad tech into durable free cash flow growth. In related news, Meta has been generating at least $3 billion a year from new WhatsApp Updates ads, and streaming gains are likely to accelerate from here, according to Citizens JMP. Additionally, TD Cowen has added Gap to its 'Best Smidcap Ideas' list on brand momentum.