That would explain Zuckerberg’s lack of drive to turn WhatsApp into a going concern. The problem has never been that it’s too difficult to make money from messaging. After all, Tencent’s WeChat — a messaging competitor in China — generated more than $US500 million in June 2022 alone, according to an estimate by market intelligence firm Sensor Tower, largely from payments, advertising and acting as a gateway to games.

The problem was that Zuckerberg’s primary motivation for buying WhatsApp in the first place was to fend it off as a competitive threat, according to mounting evidence from antitrust regulators like the US Federal Trade Commission. Facebook executives even fretted about how WhatsApp might threaten Facebook’s business after it had been acquired by the firm, according to a Bloomberg news report last week. That hardly sounds like a parent company with grand visions for its subsidiary.

Now to deal with the FTC’s attempt to force the company to divest both WhatsApp and Instagram as part of a lawsuit against the firm, Meta’s lawyers may push for a settlement that includes divesting just one. If they do, you can probably guess which company Zuckerberg would prefer to carve off.

How might a sale of WhatsApp work in practice? With no substantial revenue, an IPO would be off the table. Meta could sell the company to a private equity consortium, or a company like Microsoft, which has indicated an interest in buying a messaging business before, and (somewhat oddly) has managed to make an array of big acquisitions over the last few years without evoking real scrutiny from antitrust officials. If Softbank’s eventual IPO of Arm Holdings proves fruitful, and Masayoshi Son decides to shift his own focus from artificial intelligence and the Internet of Things to the world of messaging, he could be a potential buyer, too.

But closing that chapter on WhatsApp will highlight an unsettling truth for Meta’s investors: The company can’t seem to make money from anything other than traditional online advertising.

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Digital advertising makes up approximately 98 per cent of Meta’s revenue. Meta — like Alphabet Inc.’s Google — is hooked on the business. While Microsoft and Amazon Inc. have managed to diversify into cloud computing and gaming, Meta has failed to do the same with cryptocurrency, e-commerce and, of course, messaging.

Maybe the metaverse will be different, and Zuckerberg will find a way to pivot his thriving ad business to virtual reality. But the humbling shift in WhatsApp’s value from potential business to Meta’s most likely regulatory offering underscores how much that vision is on shaky ground.

Bloomberg