In the social media age instant messages translate to instant money, and for Asian messaging apps that can mean US$1 to US$4 per monthly active user (MAU) every quarter, analysts say. A Morgan Stanley report forecasts dominant instant messaging applications such as Japan-based Line and WeChat in China will post gains in the third quarter while Korea’s favoured KakaoTalk will stall. These messaging apps are increasingly carrying weight in Asia, with Line at 218 million monthly active users, WeChat booming at 806 million monthly active users, and Kakao reaching 40 million of the around 50 million users in Korea. As users fire off messages and emojis on these apps, the companies look for new ways to cash in through in-app advertising, but also from mobile games, banking, and e-commerce. “Messengers have diverse revenue streams,” Morgan Stanley analysts led by Sam Min wrote in a report. Line Japan has the highest advertising revenue of the three at US$1.1 to US$1.5 per MAU per quarter, with its advertising profits “likely to rise sharply” in the third quarter from performance-based ads, Morgan Stanley said. Line’s third quarter sales are projected to reach 39.3 billion yen (HK$2.92 billion), 23 per cent higher than last year and a 16.2 per cent increase from the second quarter, the analysts said. The app announced in September it would buy a 25 per cent stake in Snow, a version of Snapchat focused on the Asia market, that analysts say is a positive investment for the company. “Line can leverage Snow’s popularity across a broad Asian region,” BNP Paribas analyst Jay Han said in a note. “We see possible synergy benefits from this deal.” Line’s operations in Japan generate a total of US$3.5 to US$4 per monthly average user per quarter, around the same level of the US$4 per quarter that Facebook recently reported. Line can leverage Snow’s popularity across a broad Asian region Jay Han, BNP Paribas Meanwhile, WeChat has the lowest level of advertising revenue of the Asian messenger giants, although this number will rise to US$0.4 per MAU per quarter in the third quarter, up from US$0.3 MAU per quarter in the second quarter. And the app will continue to monetise on its “healthy” growth in users – up 34 per cent year on year in the second quarter – as well as from increased ad load and the strong performance of mobile games, Morgan Stanley analysts said. “We believe WeChat has ample room for monetisation compared to its peers, and expect WeChat to gradually enhance its monetization through better content product offerings and increasing user engagement,” the Morgan Stanley report said. This includes a hybrid-style of native advertising on WeChat Moments, its in-app social network, as well as growth in its mobile game distribution, the analysts said. In addition to ads, one-third of WeChat’s revenue comes from banking, e-commerce, and online-to-offline commerce – a strategy to attract online customers to physical stores. WeChat users can make mobile payments, hail taxis, and order food all within the app. The company recently began testing a new feature called “Little Program” that would allow users to directly access mobile services and applications within WeChat’s platform. Meanwhile, KakaoTalk has reached “saturated levels” in Korea with its high penetration of the country’s population, and analysts say its advertising revenue will stall at US$0.6 per monthly active user in the third quarter, flat from the last quarter. KB Investment & Securities analysts said Kakao Talkwill post an operating profit of US$23 million this quarter, down 4 per cent from last quarter. “Kakao ads and games’ monetisation continues to stall while other areas grow,” Morgan Stanley analysts said. Content revenue will also be flat at US$1.4 per MAU, although its outside revenue from online-to-offline commerce and gifting have seen “decent growth.” However, its Kakao Story social network is still “less engaged” than WeChat’s Moments equivalent or Line’s Timeline, Morgan Stanley said.