Tuesday, November 26, 2013

Facebook takes aim at Messenger apps and the mobile market

Facebook is testing new features on its Messenger app that improves on the mobile-to-mobile messaging feature of their app. The update lets Facebook messenger users send a text message to people who are not their Facebook friends. Users just need their friend’s phone number in order to send a message.

The new feature is seen as a way for Facebook to fend off new competitors in the mobile messaging field. WeChat, Line, and Kakao Talk are some of the upstarts that are gaining a lot of users and this no doubt attracted the attention of Facebook. Most of these apps are already in the top 10 apps used in many Asian countries according to the Nielsen Informate Mobile Insights. Many smartphone users in Asia spend a lot of time on messaging apps likeViber, Skype, BlackBerry World, along with Facebook Messenger. Markets like Malaysia, where people spend 249 minutes a day on their smartphones, present a huge opportunity for Facebook to grow their mobile advertising revenues.

The new features of Facebook’s Messenger provide more clues to their motivation for expanding the service. Facebook says that Messenger lets users “say it better with stickers,” stickers are the emoticon equivalent in many of the new messaging apps like Line and Kakao Talk.

Growing Revenues from Mobile Advertising is a Big Motivation for Facebook

Facebook is also on a quest to add more members so updating Facebook Messenger with new features to attract more members that are drawn to other messaging apps is not entirely surprising. Facebook’s rejected offer to buy Snapchat for $3 billion is another indication that they are very much interested in the mobile space. A Wall Street Journal article on Facebook’s spurned offer for Snapchat says that Facebook motivation for acquiring Snapchat is because Snapchat users are using the service through smartphones. Facebook’s interest in the mobile space is all about expanding their presence on people’s phones so that they could grow their revenue from mobile advertising.

Another way for Facebook to grow their reach in the mobile space is by reaching out to people who do not have smartphones. Facebook recently announced that they reached a milestone with their Facebook for Every Phone program. The company announced in July that there are now more than 100 million people that use Facebook for Every Phone each month. The service is described by the company as “a fast and easy-to-use native app that works on more than 3,000 different types of feature phones from almost every handset manufacturer that exists today.”

In announcing the milestone, Facebook also said they have partnerships with mobile operators around the world to provide free or discounted data access to Facebook for every phone. They say the technology is powered by Snaptu, the mobile platform that Facebook acquired in 2011.

Another indication of Facebook’s interest in the mobile space is its acquisition of Israel-based startup Onavo. This acquisition is said to help Facebook with its Internet.org initiative. The initiative seeks to bring people online, especially in developing countries.

Onavo has an app called Extend. The Extend app compresses the user’s data, thereby giving them a five-fold boost on their data plan. Facebook reportedly paid up to $200 million for Onavo.

As people spend more time on their smartphones and other mobile devices, tech companies like Facebook are keen to move into this space. Whether it’s through updating their Messenger app with new features that compete head on with those offered by other messaging apps like Line and WeChat or offering free access to Facebook on mobile phones, Facebook is clearly taking some massive steps into the mobile space and they’re prepared to pay billions to stake their claim in this growth market.