Las Vegas Review-Journal (Sunday)
Facebook might rely on three little apps
Instagram, Messenger, WhatsApp could fuel future
NEW YORK — When Facebook bought Instagram for $1 billion in 2012, it seemed like a big gamble for an unproven little app. Six years later, that little app — with Messenger and WhatsApp — are serving as Facebook’s safety net for a future that could find its flagship service on the sidelines.
Amid the company’s troubles over elections meddling, misinformation, privacy lapses, hacking and hate speech, the idea that Facebook might not always be on top has begun to take hold.
“Facebook could collapse,” said David Kirkpatrick, who wrote a 2010 book on Facebook’s early history.
In an interview, he said the elections manipulations issue “could get so terrifying that advertisers could start to back away. That’s nowhere near happening now, but it could happen.”
As Facebook stops being a virtual watercooler for friendly conversation but a lair for trolls and misinformation, advertisers might find the service too dangerous to showcase laundry detergent and shoes.
For now, Facebook is a social and advertising powerhouse with 2.23 billion users. Wall Street analysts project Facebook’s 2018 revenue will top $55 billion.
The company doesn’t break out revenue among its apps, but eMarketer estimates that Instagram will bring in 16 percent of Facebook’s advertising revenue this year and 25 percent by 2020.
“It really speaks to the fact that advertisers love Instagram,” eMarketer analyst Debra Aho Williamson said. “It has the appeal of being a generally positive environment.”
Instagram is becoming the top social media service for many brands to interact with consumers, said Yuval Ben-Itzhak, CEO of the social media marketing firm Socialbakers.
The company reaches a smaller audience than Facebook, but users are “engaging,” or interacting, a lot more with the advertisers, he said.
Facebook is working hard to ensure that Messenger and later, WhatsApp, become viable businesses as well. Facebook announced plans last week to make its Messenger app simpler and easier to use. But the redesign also makes it clear that messages from businesses and ads are becoming increasingly important. Such messages are now front and center alongside messages with friends and other individuals.
Stan Chudnovsky, head of product for messaging at Facebook, said the primary intent wasn’t to elevate messaging with businesses. But he said that “when people spend more and more time communicating with each other on a platform, inevitably that is where businesses need to be. It’s almost like print happened, and then businesses needed to be on print.”
Facebook is working hard to nudge people and businesses in that direction, convincing them that chatting on Messenger is more efficient than, say, emailing, calling — or tweeting at — an airline, a clothing store or even your bank.
Amid the company’s troubles over election meddling, misinformation, privacy lapses, hacking and hate speech, the idea that Facebook might not always be on top has begun to take hold.