Facebook F8: How Messenger will change customer service

27 Mar 2015 | Author: | No comments yet »

Facebook F8: How Messenger will change customer service.

Mark Zuckerberg likes to say that he’s willing to bet big on things with no immediate payoff — whether dropping $19 billion on WhatsApp or beaming Internet access to developing countries through drones. If you want to find out details about a local business, such as what its hours are or whether it has a particular item in stock, you probably look first on its website or social media page.Facebook (FB) shares today rose 9 cents to close at $83.01 as the Street contemplated the various enhancements and partnerships for its “Messenger” program announced yesterday by CEO Mark Zuckerberg at the company’s “F8″ developer conference in San Francisco yesterday.When Mark Zuckerberg took to the stage at Facebook’s F8 developer conference on Wednesday, he announced its “biggest strategy shift in many years”.SOCIAL NETWORK Facebook continues to perfect its walled-garden experience and is now offering developers the chance to build apps that link directly with its Messenger chat option, along with a version aimed at business users.

But the Facebook founder and CEO has been unwilling or unable to apply this same go-for-broke mentality to a goal crucial to his company’s future: persuading people to buy stuff directly through the world’s largest social network. Other announcements followed today, such as discussion of the forthcoming consumer release of the Oculus Rift virtual reality gear; something called “FbStart,” a program to sign up developers and offer them tools such as “Parse,” an Internet-of-things development library; and something called “Share Sheet,” to allow users to link content across various parts of the Facebook empire, including Instagram and WhatsApp. SunTrust Robinson Humphrey’s Rob Peck reiterates a Buy rating, writing that Messenger and such apps are “the new portal” for the Web, and that coupled with things like a payments service, it can mean a lot of additional revenue for Facebook: Internet 1.0 was popularized by portals like Yahoo! and AOL.

Facebook, which spent about $24bn on acquisitions last year, including buying messaging app WhatsApp for almost $22bn, has long rejected claims that it could become a conglomerate in the mould of consumer goods groups such as Procter & Gamble. People will also have the option to ask a business questions, make requests and get quick responses.” This back and forth will all be presented in the common Messenger way, which is as a single ongoing tedious stream of blah communications thread between parties. µ Zuckerberg told the crowd. “It’s just not fast or convenient and it definitely doesn’t feel like the future.” Facebook plans to revamp its Messenger app with a suite of new features that will allow businesses to give personalized online service to customers. The Businesses on Messenger program will let companies chat in real time with customers, send order-tracking information, and give customers interactive receipts tied to their orders.

But as WhatsApp, Messenger, and Instagram continue to grow, with monthly active user numbers swelling to 700 million, 600 million, and 300 million respectively, Facebook has proved that naysayers know nothing about what people want from the apps they use every day. In other words, the strategic priorities for both companies is to continue to milk the ad well dry — this time through digital video versus website banners and search results.

That way, users can share videos, photos, music, and other kinds of media more easily, and can create their own GIFs or special-effects videos to share with friends. WhatsApp cofounder Brian Acton, Instagram cofounder Mike Krieger, and Facebook’s David Marcus, vice president of messaging, said the infrastructure and talent Facebook provides makes it possible to improve the apps without worrying about servers or hiring the best engineers. Mobile video ad revenue in the United States will exceed $4.4 billion in 2018, according to BI Intelligence, up by a five-year compound annual growth rate of 73 percent from 2013.

Further, Facebook would not only help create deeper relationships for brands, but have access to direct sales information, “closing the loop” in advertising allowing Facebook to demonstrate direct ROI from various types of ads. Analysts believe Facebook could charge for its new Messenger for Business service, and how the service begins to monetise its offering could be copied by WhatsApp. The hard stuff is handled. “We looked at it as a model for success,” Acton said. “We were able to have the confidence that our partnership with Facebook would work well.

The userbases of the company’s individual businesses are among the largest in the world yet none has generated meaningful revenue: WhatsApp has 700m users, Messenger 600m, and photo-sharing app Instagram has 300m. We had an alignment of mission in terms of connecting the world’s population.” (Left to right) Moderator Mary Meeker, of Kleiner Perkins Caufield & Byers, with Brian Acton, cofounder of WhatsApp; Mike Krieger, cofounder and technical lead of Instagram; and David Marcus, VP of messaging at Facebook. And those numbers don’t even include mobile purchases. “Commerce is worth way more than content,” said Marc Weiser, founder and managing partner of RPM Ventures, an early-stage investing firm with offices in Ann Arbor, Mich., and San Francisco. “If you can monetize that commerce, we’re talking about some explosive growth.” And as retailers continue to build out their social media efforts, the need to convert millions of eyeballs into paying customers remains ever present. Facebook Messenger, which is a separate product from the mainline Facebook app, currently has 600 million users, and the company hopes this new focus on developers will push that number even higher.

In fact, a recent survey of retailers by financial services firm CIT found that “finding ways to use social media to drive sales” was the top social media obstacle. With over 400K developers and 1.4B users, we believe the Parse technology that helps connect these devices has the potential to make Facebook the “OS” for them, as they track and communicate information to consumers via Facebook.

So WhatsApp isn’t concerned with Messenger’s forays into payments and platform. “We continue to develop our products independently,” Acton said. “Platform is not top of mind for us. At F8, Oculus talked about a new level of social interaction (you can be anywhere with anyone, virtually) as a core utility of VR.We expect the price will be between $200-$400, plus a high performance graphics computer, which will be around $1,000 (all-in cost of $1,200-$1,400). The F8 conference was the first time co-founders of WhatsApp and Instagram, and the head of Facebook Messenger appeared on stage together to discuss their relationship with each other and Facebook proper.

We share ideas, technologies, and infrastructure, but there’s no strong competition.” Is it possible that Instagram, Messenger, and WhatsApp will eventually become a communication monolith, a feature-loaded app that lets you message friends, make restaurant reservations, and pay your rent without ever leaving Facebook? Along with this consumer hardware launch, we expect compelling content to ramp early in 2016, which should set the stage for a favorable earlier adopter Oculus buy-in. Spherical videos, such as those produced for virtual-reality headsets, are filmed with several cameras simultaneously to cover the user’s entire field of view. Facebook and Twitter not only need to develop the right interface and software for payments, shipping and tracking, but also enlist enough retailers to make social commerce work, Koo said.

Oculus Rift is a significant long term (5+ years) opportunity for Facebook, but we believe that before Oculus impacts Facebook’s financials investor hype around the opportunity could move shares of FB higher. Facebook’s evolution from a single core app into a family of unbundled apps that each attract hundreds of millions of users each month marks the company’s biggest shift in strategy in many years. Facebook was often criticized for cramming too many features into the big blue app, and so it started spinning off new ideas (and a few old ones) into stand-alone apps. Facebook’s core application is used by 1.4B people every month, but Groups (700mm), WhatsApp (700mm), Messenger (600mm), and Instagram (300mm) each carry impressive reach in their own right.

Devitt is especially intrigued by the Facebook’s intention to spread use of Messenger, and of third-party applications built on top of it, to the business community: Facebook’s biggest announcement was that Messenger would be opened up as a platform for 3rd parties. Developers can now build richer tools for expression in Messenger than Facebook could have built itself, which can provide enhanced discovery, distribution, and attribution for their apps.

So my question is: when are we going to see them bicker?” Facebook may also have more control over Messenger because it is home grown and headed by David Marcus, whom Mr Zuckerberg hired from PayPal. Discovery is in Messenger but the content you share on Messenger isn’t created in the app.” And developers aren’t too happy about it, but WhatsApp’s mission to make its app stable for every mobile platform around the world is keeping the company from releasing an API. There was some groaning in the crowd, but Acton stood his ground. “We want to be careful about inundating people with messages they don’t want,” Acton said. “I receive emails from people on a routine basis who want to run their business with WhatsApp as the backbone of communication.

Messenger for businesses could potentially become an even more compelling enhancement to the product, as Facebook will provide a streamlined way for users to communicate with businesses and track receipts / shipping info after their purchases. Opening it up to developers might not break those promises, but it could ruin the simplicity of the app that its founders have always prized — and alienate users. Mr Acton suggested it could add more features in an “intelligent and thoughtful fashion” if users demanded it but stressed that there were no plans to follow Messenger’s lead any time soon.

He added, however, that whatever Mr Zuckerberg said about Facebook being a family, it was really following the holding company model used by most advertising agencies — and it was right to do so. “The consumer brand matters,” he said. “You want to keep the brand attributes somewhat different.

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