Facebook's Big Platform Bets Are Starting to Pay Off

5 years, 9 months ago - April 13, 2016
For many months, analysts and investors have wondered when Facebook would start to make money from some of its big secondary apps like Messenger and WhatsApp.

On Tuesday, the company provided its clearest indication yet that it's finally ready to start trying. The first attempt: offering "sponsored messages" from businesses on Facebook Messenger.

"We're also conducting small-scale experiments with businesses to enable them to re-engage their customers with sponsored messages," David Marcus, head of Facebook Messenger, said on stage at Facebook's F8 conference.

Just as quickly as the words had left his mouth, he moved on to other topics.

Facebook is always thinking about new ways to make more money off of you — it must in order to maintain its fast-paced sales growth — but the company's executives know better than to talk too openly about that at its biggest event of the year.

But make no mistake about it: Facebook's big event on Tuesday marked yet another step toward making money off of its big platform bets. In addition to sponsored messages, Facebook played up opportunities for businesses to communicate with customers through Messenger. And when there are customer interactions, money is never far behind.

"They are being careful," says Jan Dawson, an analyst at Jackdaw Research. "But they're also recognizing that Messenger in particular has now scaled to the point where it can become a viable platform in its own right, and that also provides opportunities for monetization."

The money-making move comes less than two years after Facebook split Messenger into a standalone application, angering a large number of users. Since then, Messenger has ballooned to nearly one billion monthly users and offers a distinct ecosystem to make money without relying on basic News Feed ads.

Messenger isn't the only young platform Facebook is starting to cash in on. In recent months, Facebook has also opened the floodgates for Instagram advertising, after snatching up the photo-sharing service for just shy of $1 billion in 2012.

At F8, Facebook's team also took time to talk up the Oculus VR headsets, which went on sale this year for $600. Facebook acquired Oculus in 2014 for $2 billion.

"Facebook is indeed getting more serious about monetization across platforms," says Brian Blau, an analyst who covers Facebook for Gartner. "The individual apps and services are at a point in terms of reach and engagement where they can sustain themselves... Instagram, WhatsApp, Messenger, even Oculus have either reached that point or will soon."

Mark Zuckerberg, Facebook's cofounder and CEO, hinted at this during his keynote speech on Tuesday — while making sure to stay clear of actually dropping the M-word.

"We have a playbook for building these services: first we build a new technology that can help people share and connect in some new ways. Then we take that technology and we build it into a product that a billion or more people could use and benefit from," Zuckerberg said. "And then finally once a product is at scale, we build a full ecosystem around that product of developers and businesses and partners."

Businesses and partners, in case you can't guess, means money. 

"We have several products that are already at scale with lots of people using them that we now need to build into full ecosystems with developer and businesses."

Text by Mashable

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