users on iOS and Android devices who wish to message their
friends must now download the company's Messenger application.
Naturally, this has created a lot of controversy and unhappy
users: The app has a rating of just one star on the
App Store since Facebook required the download. While the company
claims the move is intendedto improve the user experience with
more features, five specific big-picture reasons appear more
important to the social media giant.
Users are too slow to respond
Up to this point, many users have had no reason to download the
Messenger application. After all, why download Messenger when the
Facebook application already enabled users to send messages to
However, with over 200 million of its 1.3 billion total users
on Messenger, Facebook has noticed that consumers tend to respond
to text messaging 20% faster than Facebook messages alone. That
20% faster response can mean a big difference to the number of
total messages sent and received, which is key to keeping users
engaged and to supporting the advertising dollars that Facebook
Moreover, on Facebook's latest conference call, CEO Mark
Zuckerberg said users spend approximately 40 minutes per day on
Facebook. The company believes it can boost that number above by
driving users toward the messaging app. Essentially, Messenger
keeps users engaged with Facebook as a platform longer.
To own the consumer's smartphone
Facebook's experience with its own smartphone may have been a
disaster, but its applications are blockbusters. According to App
Annie, Facebook owns the top four most downloaded applications on
Android and iOS devices.
The company owns Messenger, Instagram, WhatsApp, and, of
course, Facebook itself. That means Facebook has a tight lock
onconsumers' activity on the smartphone, a luxury it most
certainly wants to keep.
More monetization options
There is another reason that having more popular applications is
important: more monetization options.
For example, Facebook's core application accounted for 62% of
the company's $2.68 billion in advertising revenue during its
last quarter. This shows the company has figured out how to
successfully monetize mobile.
WhatsApp and Instagram remain lightly monetized, with the
former having no advertisements, while Messenger is not monetized
at all. Yet given Facebook's prior success, combined with having
four very popular applications, consumers and investors have to
believe that much of the company's decision regarding Messenger
involves the opportunity to create more revenue and income
through the different apps.
The most important reason
The No. 1 reason that Facebook has implemented the messaging
change ismobile payment processing.
Facebook's actions have pretty much confirmed that Messenger
will be instrumental in its new payment processing business. Also
note that the company recently hired former PayPal chief David
Marcus to head its Messenger initiative. Its words are telling as
well: Zuckerberg said on the recent conference call that payments
will become a large piece of the platform's future, which
complements news that the company is testing a "Buy" button.
Rumors of Facebook's mobile payments initiative began to stir
's CEO called it "
the next big thing
," and said that BlackBerry had already begun to strike deals
with certain businesses for a per-transaction business model on
its own messaging app, much like PayPal.
's PayPal generated nearly $1.75 billion in second-quarter
revenue with only 152 million users, think about how lucrative
Messenger could be for Facebook now that all mobile users are
required to download and use the application.
While the details of how payments will work are sketchy, the
pieces of the puzzle fit together nicely. Facebook already has an
enormous platform for small and large businesses that advertise
on the website. It seems natural that Facebook would allow
advertisers to sell specific items, and that users will be able
to buy via Messenger or on its platform. As a result, advertising
on Facebook becomes more valuable, as businesses are not only
gaining new likes, but also selling products.
Control U.S. and rest of world
When you look at the big picture, it's no surprise Facebook wants
users on Messenger. Also, it partially explains the $16 billion
it spent to buy WhatsApp.
Messenger users are primarily located in the U.S. Meanwhile,
WhatsApp's 500 million-plus users are largely outside the U.S.
with a strong presence in India, Mexico, and Europe, among other
regions. This level of diversification between the two
applications bodes well for Facebook's mobile payments
Facebook can create a platform in which currency can be
exchanged seamlessly, connecting different countries. This rumor
arose earlier this year when Facebook applied for a license to
launch an electronic money service in Ireland. Hence, Facebook's
plan with Messenger may not only support the purchase of goods in
the U.S., but also the transmission of currency and the purchase
of goods between countries.
The cool thing about Facebook, and why it has been so
transcendent, is because its management seems to always be one
step ahead of the consumer, knowing what the user wants in
advance. The required Messenger download might be a hassle today,
but chances are that Facebook has big plans for how users will
experience it later down the road.
As of now, all signs point toward payments being the long-term
catalyst behind the decision, but rest assured that Facebook has
plans in the book that we're not even considering. It wouldn't be
Facebook if it didn't.
Leaked: Apple's next smart device (warning, it may
Apple recently recruited a secret-development "dream team" to
guarantee its newest smart device was kept hidden from the
public for as long as possible. But the secret is out, and some
early viewers are claiming its everyday impact could trump the
the iPad. In fact, ABI Research predicts 485 million
of this type of device will be sold per year. But one small
company makes Apple's gadget possible. And its stock
price has nearly unlimited room to run for early-in-the-know
investors. To be one of them, and see Apple's newest smart
5 Reasons Why Facebook Wants You to Download its
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