Facebook Goes All In On E-commerce By Bringing Businesses Onto Messenger

26 Mar 2015 | Author: | No comments yet »

Facebook Goes All In On E-Commerce By Bringing Businesses Onto Messenger.

Facebook is trying to mold its Messenger app into a more versatile communications hub as smartphones create new ways for people to connect with friends and businesses beyond the walls of the company’s ubiquitous social network.

SAN FRANCISCO — The shift from desktop to mobile advertising, once the biggest concern among Facebook investors, is now the company’s biggest strategic advantage. And a new report out this week, which predicts mobile advertising will represent more than half of all digital ad spending by 2016, suggests the mobile wave Facebook is riding is just starting to roll. By the end of April, Messenger will also be adding the ability to display store receipts and shipping information to help consumers keep track of their interactions with merchants and other businesses. On Wednesday, Facebook announced it was launching “Businesses on Messenger,” a set of new services that will allow companies to interact individually with customers through Facebook’s messenger app.

The move comes less than two weeks after YouTube begin supporting a similar video functionality, which allows users to see different vantage points on a video. CEO Mark Zuckerberg made clear in his Wednesday morning keynote that the company plans to use its developer community to expand its already-large mobile footprint as social networking evolves. “It’s a really big opportunity, but we can’t do it alone,” Zuckerberg said shortly after revealing that Facebook users around the globe view a staggering 3 billion videos per day on the site. Part of a larger rollout of the Menlo Park, Calif.-based social network’s new platform strategy, Businesses on Messenger will potentially allow for a consumer to receive order notifications via instant message, or–even better–buy items directly through the messenger app. Five years from now, it will be primarily video, he said, adding that Facebook Messenger users now make 10% of all mobile voice calls made over the Internet. David Marcus, Facebook’s vice president of messaging products, said this would be an improvement from customers getting several e-mails from retailers that often cause them to click on links and go through steps to authenticate their identity, which can be inconvenient.

Though it’s still early days, Facebook’s integration of business into Messenger could be the company’s ticket into the wider world of online retail. The company’s fourth-quarter expenses rose 87% from a year earlier, more than its sales growth of 49%, and company executives said in January that trend will continue this year.

Now, users will be able to communicate with businesses directly through Messenger and see a map showing where their package is, without going to a separate website. Facebook appears well aware of our coming shift away from “flat videos,” and is getting ahead of the trend. “If you look back at Facebook five years ago, most of the content that people shared was text, status updates and wall posts,” Zuckerberg said in his keynote address. “Now today it’s photos, and other visual content. Facebook showed where some of that money is going today, as it unveiled new features for its Messenger texting service, a tool for embedding videos, and better analytics for app developers.

The push to plant more features in Messenger underscores the growing importance of apps that enable more intimate and direct conversations than social networks. Marcus then showed how he could buy a shirt from retailer Everlane, Facebook’s second retail partner on this effort, receive a confirmation and even modify his order, all within Messenger. John Shinal has covered tech and financial markets for more than 15 years at Bloomberg, BusinessWeek, The San Francisco Chronicle, Dow Jones MarketWatch, Wall Street Journal Digital Network and others.

And if you look out even further beyond that it’s probably going to be even more immersive content like [virtual reality and augmented reality].” “We’re at this interesting transition,” Zuckerberg said Wednesday. “We’re starting to see traditional video blend with even more immersive content. The partnership with businesses was announced at F8, Facebook’s two-day developer conference, which kicked off Wednesday morning at Fort Mason Center in San Francisco. On Wednesday morning, Facebook also announced it will open its Messenger platform to developers, allowing people to install apps on Messenger and increase the amount of ways they can express themselves on the platform.

In an age where the buzzphrase of “online-to-offline” has business owners scrambling to try any app or service that will bring them more customers, the Messenger integration could be a boon. It’s not crazy to expect that one day instead of flipping through photos of a friends’ safari on Facebook, you’ll strap on a virtual-reality headset, look to your left and get chills because you’re staring at a lion. Facebook’s revenue last year surged 58 percent to $12.5 billion, a performance that has enabled the company’s stock price to more than double from its initial public offering price of $38 in 2012. Facebook certainly has the users and as it unrolls its recently announced peer-to-peer payments service, it will soon have a valuable repository of payment credentials. That scenario is a long way off (Facebook’s payment service will strictly be person-to-person as it rolls out in the U.S.), but it’s fun to consider and as Facebook spreads its tentacles into a new area, potential rivals like Yelp and Amazon.com are no doubt paying attention.

That threat is propelling Messenger’s expansion and also prompted Zuckerberg to spend $22 billion last year to buy WhatsApp, another mobile messaging service that has more than 700 million users. Mark Zuckerberg may soon be able buy all the gray hoodies his heart desires through his own service as the world’s social network transforms into its next commerce network. A large segment of WhatsApp’s audience is located in less affluent countries outside the U.S. and western Europe, making it more likely that it won’t be adding as many new tools as Messenger has, said David Marcus, who oversees Facebook’s messaging products. Most Messenger apps are installed on iPhones and top-of-the-line Android phones, which provide the processing power needed to handle a range of multipurpose tools.

The decision to allow outside applications to operate within Messenger mirrors a pivotal decision that Zuckerberg made eight years ago when he opened Facebook to other programmers. Marcus, who formerly ran PayPal, is hoping Messenger will follow a similar pattern now that it is operating as an open platform. “We have opened the floodgates,” he said. Facebook is counting on apps from other developers to enable Messenger users to express their feelings with GIFs, audio clips and other dynamic formats that “will bring a smile to people’s faces,” Marcus said. In his presentation, Zuckerberg predicted messaging apps eventually will include virtual-reality technology, something that Facebook acquired last year when it bought Oculus for $2 billion.

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