Confirming earlier rumors
Facebook Inc (
recently released Slingshot, a smartphone photo and video sharing
app, which has been touted as a prospective competitor to Snapchat.
The app is available on
iOS 7 and
Slingshot does not require a Facebook account to sign in, which
will attract privacy-conscious users. Moreover, in order to
interact with friends, a Slingshot user needs to be much more
pro-active than other messaging services. The app requires a new
user to first share one of his/her photo and video to unlock a
We believe that this requirement further improves privacy, as it
gives users an option to not reciprocate to connections they wish
to ignore. Users can swipe-away the photo or video message without
unlocking it. They also need not worry about it later on due to the
app's self-destructive feature, very similar to Snapchat.
Facebook believes that the new app will attract users due to the
creative opportunity it presents. The app has already received some
rave reviews from users who have praised its innovative interface.
Although the app's similarities to Snapchat is bound to face some
criticism, we believe that Slingshot is a much better offering than
Poke, which Facebook launched in 2012. Poke received flak for
blindly imitating Snapchat, the primary reason behind its failure.
Poke's failure forced Facebook to look into inorganic ways to
expand into the growing private messaging segment. However, its
$3.0 billion offer was rejected by Snapchat in Nov 2013. Snapchat
stated that it would prefer to remain independent and wait for a
better proposal until 2014.
Facebook's interest in Snapchat was particularly due to its growing
teenage user base. Snapchat's attraction particularly among the
teens remains is due to the privacy it provides (since it destroys
the photos and videos instead of storing) that is elusive on the
Slingshot, being an independent app, will provide significant
competition to Snapchat in this regard. Facebook's huge user base
and scale will help Slingshot to expand without worrying about
monetization, unlike its competitors like Snapchat.
Facebook is aiming at building a mobile eco-system surrounding its
social network. The aim is to offer every possible service and
product on mobile to users around the world. Internet.org, WhatsApp
and Oculus VR are some of the pillars of this growth strategy.
However, these three pillars are more long term focused. The new
Slingshot app and fast growing Instagram are expected to drive
Facebook's ad revenues in the near term. However, intensifying
competition from Google and
remains a major headwind.
Currently, Facebook has a Zacks Rank #2 (Buy).
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