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Investing.com -- Meta Platforms’ latest move to monetize WhatsApp could add billions to its revenue over time, according to a new note from Morgan Stanley (NYSE:MS).
The company recently announced it will begin rolling out ads in the app’s Updates tab, with analysts seeing a clear path to generating $3 billion to $5 billion annually from the initiative, potentially rising to over $6 billion in a bull case.
Meta (NASDAQ:META) will introduce "Status ads" within the Updates section of WhatsApp, which is used by roughly 1.5 billion users each day.
Morgan Stanley explained that the ads will not appear in private messages or calls, and will rely on the Updates tab’s Status feature, which is conceptually similar to Instagram Stories.
Meta is also said to be planning to add monetization tools in WhatsApp Channels, including Promoted Channels and Channel Subscriptions.
“While 1.5bn users is significant, it’s important to remember that most (~95%) of WhatsApp users are outside of the U.S.,” Morgan Stanley wrote, noting that international monetization is typically lower.
Still, the analysts believe Meta’s ad infrastructure and user scale could support “a ~$3bn–$5bn business.”
Their base scenarios assume 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 $6bn+ 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.