Facebook – Too many chats?

Facebook needs one chat system that is a part of the whole.

• Facebook’s strategy around chat looks like a hodgepodge of different offerings that is likely to leave users non-plussed.
• Facebook has announced that it will discontinue instant messaging inside its own application but what it will be replaced with is not clear.
• Facebook owns WhatsApp, is developing a Snapchat lookalike called Slingshot and has now recruited David Marcus, the president of PayPal to put it all together and make money from it.
• The first problem he will face is that Facebook has already promised that WhatsApp will continue to operate independently and maintain its brand.
• This means that the biggest and most important part of any messaging strategy cannot be used to make the Facebook experience deeper or richer.
• Hence, I am somewhat uncertain what David Marcus is going to be able to achieve as his hands seem to be tied even before he starts work.
• Facebook knows that it cannot live forever as a provider of social networking, but its strategy feels rushed and badly thought through.
• Social networking represents 24% of the Digital Life pie with activities like gaming, browsing, media consumption and instant messaging being the next biggest segments.
• In order to really grow its revenues Facebook needs to extend its offering into these segments in a manner that is consistent and easy to understand for users.
• Both Line and KakaoTalk have shown that there is money to be made by extending chat into gaming and stickers but WhatsApp refuses to budge.
• This makes no sense to me as without some change or extension, WhatsApp will remain a $19bn asset with virtually no revenues.
• In my opinion, WhatsApp represents the best opportunity for Facebook to move into the important gaming segment but this will require some integration into Facebook as well as changes at WhatsApp itself.
• Hence, I suspect that David Marcus will have a frustrating and difficult time at Facebook.
• In order to succeed he needs to be successful in instigating substantial change allowing him to integrate all of Facebook’s messaging options into a single solution that users can get behind.
• This then needs to be extended to cover as many other areas of the Digital Life pie as possible.
• Gaming is the one that leaps first to mind and is the only way that Facebook can hope to earn a return on the $19bn spent on WhatsApp.
• Without integration, users are likely to continuing viewing Facebook as their choice for social networking and nothing more.