What Is a User Worth?

How platforms measure average revenue per user, why an American user is worth far more than an Indian user, and how user numbers drive company valuations.

Platforms track average revenue per user (ARPU).

ARPU gaps

Meta earns far more per user in North America than in the Asia-Pacific region, often more than ten times more.
Advertisers pay more to reach higher-income users.

Valuation

Investors value platforms based on user numbers, engagement and ARPU growth.
When Facebook bought WhatsApp in 2014 for about 19 billion dollars, WhatsApp had little revenue but hundreds of millions of users.

Growing ARPU

Platforms raise ARPU through better ad targeting, shopping features and payments.

India’s potential

As Indian incomes grow, ARPU could rise, making India more valuable.

Your data

Some economists propose paying users for their data, though this is hard in practice.

The WhatsApp price

Facebook paid about 19 billion dollars for WhatsApp in 2014, valuing each user at around 40 dollars despite tiny revenues.

Thinking all users are worth the same to platforms

Richer markets generate far more revenue per user.

Key takeaways

ARPU measures revenue per user.
US users are worth far more than Indian users.
WhatsApp was bought for about 19 billion dollars in 2014.
Rising incomes could raise Indian ARPU.