Meta Platforms (META 2.05%) CEO Mark Zuckerberg said WhatsApp will be the next major growth pillar for the company at a town hall in November. Half a year later, it looks like he's delivering on that promise.

While Zuckerberg and CFO Susan Li have touted the momentum of WhatsApp's click-to-message and paid messaging services during recent earnings calls, we now know how fast it's growing. Over the last three years, WhatsApp for Business has added 150 million monthly active users, reaching 200 million in total. Those are small businesses looking to connect with customers through the most popular messaging app in the world.

With 200 million businesses using the service, Meta is now increasingly focused on turning it into a meaningful source of revenue growth for the social media company.

The massive opportunity in messaging

Indeed, 200 million might not sound like much when Meta's throwing around numbers like 3.8 billion monthly active users across its family of apps. But that's 200 million potential paying customers.

For reference, Meta said it had 200 million businesses using its free tools on Facebook and Instagram in October 2020, and 10 million of those businesses were active advertisers across its services. That year, Meta generated over $84 billion in advertising revenue.

Along with the announcement that 200 million businesses now use WhatsApp for Business, Meta is making it possible for them to advertise on Facebook and Instagram without a Facebook account. While there's likely a lot of overlap of businesses using multiple Meta apps, the move makes it easier for businesses to use the platform's increasingly popular click-to-message ads.

Click-to-message is already a $10 billion business between Messenger, WhatsApp, and Instagram direct messages. The ad format has become even more important following the implementation of App Tracking Transparency and other efforts to prevent Meta from tracking user actions outside its own apps.

Keeping business and consumer interactions and transactions on Meta's apps gives businesses a better idea of how well their ad spend converts into sales. Investors should expect the format to continue growing as more businesses are able to manage their entire operations from WhatsApp.

There's an additional opportunity in messaging, though: paid messaging. WhatsApp already offers businesses an opportunity to connect with customers for a 24-hour period using its paid messaging service. It charges different rates, based on whether it's a marketing, utility, authentication, or customer service conversation. Management said it saw a 40% sequential increase in the number of businesses using paid messaging in the first quarter.

WhatsApp for Business's next step is to offer more automated paid messaging services, including appointment reminders and personalized marketing messages, instead of requiring a human to manually send those messages to potential customers. With that, Meta can offer a full-service advertising funnel with ways to attract, connect, and sell to customers, all through WhatsApp.

Driving growth

Analysts have modest expectations for Meta's revenue growth over the next few years, but improving WhatsApp monetization could help Meta outperform.

Analysts are currently calling for just 8.5% revenue growth for full-year 2023. That said, revenue growth should accelerate in the back half of the year, thanks to easier comparable quarters. Analysts think revenue growth will accelerate slightly in 2024, reaching 10.9% for the year.

Granted, when we're talking about more than $100 billion, even 10% revenue growth is a big amount. As mentioned, the click-to-message ad format that management is so proud of is a $10 billion business but represents just 8.6% of total sales for last year.

Still, investors shouldn't discount the potential for WhatsApp to play an important role in Meta's revenue growth over the next few years. As the company pushes to monetize the sizable base of businesses on its messaging app with a greater focus on connecting those businesses with potential customers, it could finally start to pay off in meaningful amounts of revenue.

WhatsApp for Business has as many businesses as the entire Facebook/Instagram ecosystem had in 2020. Monetizing them at just 10% of 2020 levels would add another $8 billion or so of annual revenue.

Over time, monetization rates could prove much higher as Meta leverages the ability to directly message over 2 billion people. Therefore, even after the stock's run-up in price this year, it remains an appealing portfolio candidate.