The strategy that Facebook Inc (NASDAQ:FB) is currently following may be a mystery to many of its investors, but the company is certainly moving with intention. The firm’s most recent move, to remove messaging from its mobile application, is even more difficult to understand than the $2 billion Oculus acquisition. However, it may be one of the best moves the company’s made in a long time.
Facebook Inc (NASDAQ:FB) has been doing its best to up its mobile earnings, and the company’s strategy has been working well so far. It’s recent acquisition of WhatsApp for $20 billion shows that the company is serious about messaging on mobile. The removal of messaging from its mobile application, and the creation of a separate messaging application, is difficult to judge, but there is method behind their madness.
Facebook moves toward platforming
Facebook Inc (NASDAQ:FB) cannot afford to be a simple social network. The company is valued too highly, and has too much competition to remain in that niche. Google Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) was, for many years, a simple search and advertising business. The firm managed to change itself into the foundation of much of the internet. Amazon.com, Inc. (NASDAQ:AMZN) managed to do the same thing.
The endeavor to turn itself into a part of the internet’s infrastructure rather than the leading social network is fraught with challenge, but Facebook Inc (NASDAQ:FB) has handled it impressively thus far. The company’s Facebook Home application may not have been greeted with the greatest of responses, but Facebook Paper seems to be doing well.
Facebook Inc (NASDAQ:FB) needs to turn itself into a platform provider rather than a social network. In order to do that it needs to stop being recognized as just a social network. Splitting its messaging off from is social network shows that the company is on the ball. Messaging has become a separate arena from social networking. Facebook has recognized that, and it’s leveraging that, along with its recent acquisitions, to mirror Google’s expansion.
Facebook walking on thin ice
Just because Facebook Inc (NASDAQ:FB) has good intentions doesn’t mean it’s going to succeed. The company is trying to force its users to download another messaging application in order to communicate across its social network. That’s not the easiest ask. As many developers have discovered, giving something away for free isn’t enough to get people to use it.
Facebook Inc (NASDAQ:FB) users may decide to forgo using the messaging application, and they may decide to use the core Facebook mobile application less because it is no longer as useful. Facebook needs to expand, but it can’t afford to hurt its brand on the way to becoming a platform. The company’s future, and its stock price, depend on the success of this venture. That’s in no way guaranteed right now.