How do free applications earn money other than playing advertisements?

A one liner explains it all :

" WhatsApp is not their product. It is YOU ".

They sell you.
Have you ever read T&C while signing up?

I think you are aware of Facebook's WhatsApp acquisition.
After this acquisition, I can find my whatsapp contacts being shown as friend suggestions on Facebook.
That means, it is clear that whatsapp shares data with its parent Facebook.

The size of the deal is 19 billion$ (Page on forbes.com ) only because Facebook thinks "Our Data is worth it"

These companies play with our data and do all sorts of analytics and come up with a solution what we want (bit of optimism).
21st century internet users should understand that their data is not secure on cloud. And this is obvious.

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