Facebook is considering integrating messaging services across its three distinct messaging apps, WhatsApp, Instagram, and Facebook Messenger, that would be completed by the end of this year or early 2020, according to The New York Times.
The three services would continue to operate as standalone apps, but would have a unified underlying infrastructure that would push end-to-end encryption across all three. Currently, WhatsApp is the only one of the three to encrypt users‘ chats by default; Messenger has an encryption option, but it requires a user to turn it on.
We view this as a broad play to combine, contain, and entrench users across Facebook’s messaging ecosystem. Messaging is a sticky application that keeps users loyal to their respective platforms, per The Information. The integration will allow users to message any other user across any of Facebook’s other apps: Someone using Messenger could chat with someone using WhatsApp, for example.
That capability frictionlessly extends the range of connections possible via any one of the apps, and applies equally to users partial to any one platform within the ecosystem. Broadening the range of connections could help Facebook’s messaging services to become even more ubiquitous among users, as they can now reach virtually anyone, via their personally preferred method. Ultimately, that could help Facebook to compete with and overtake other popular messaging apps from Apple (iMessage) or Google, particularly in high-value developed markets.
Facebook’s messaging apps represent a massive, global addressable user base — much of which generates relatively little revenue. Worldwide, WhatsApp has 1.5 billion users, followed by Messenger with 1.3 billion, and Instagram with 1 billion. As more users share via messaging apps, these are becoming a bigger part of Facebook’s overall revenue diversification strategy away from News Feed, per comments by head of Messenger Stan Chudnovsky to The Information. Questions remain as to how exactly the integration could impact Facebook fortunes, but it’s reasonable to assume that the integration could generate new types of cross-platform ad products or services.
Although end-to-end encryption across the apps could limit Facebook’s ability to harvest some types of data, the integration would still enable Facebook to gather and pool together user engagement data across the three properties. Currently, Facebook says it doesn’t serve ads based on the content of users‘ chats on Messenger, but if that were to change, merging collective engagement data could significantly boost the company’s already precise ad-targeting ability.
Lastly, speculation is now floating that the integration could help to insulate Facebook from regulatory scrutiny on antitrust grounds. Operating with a common infrastructure, Facebook will essentially be able to argue that the three distinct apps are in fact a single product, which could make it more difficult for regulators to break them up.
Source: Business insider