Facebook Inc (NASDAQ:FB) is working on its own video-chat dubbed as Slingshot after it was turned down by Snapchat regarding its proposed takeover of the mobile messaging startup, according to the reports from Financial Times. Furthermore, the social networking app is in a continuous process to develop a planned video chat app through which the users could exchange short video messages using a touch screen, according to FT citing sources familiar with the developments.
Facebook must work on Snapchat’s limitations
According to the sources, Slingshot from Facebook Inc (NASDAQ:FB) could be released this month or it may be even cancelled by the company altogether. Mark Zuckerberg, CEO of Facebook, is heading up the “top secret” project after his rejected attempt to acquire Snapchat for $3 billion last year. Snapchat is hot among teenagers, who can exchange photos that automatically fade away after few seconds.
While the new app from Facebook Inc (NASDAQ:FB) is said to be similar to Snapchat, but one drawback of Snapchat for which it has been sued is that the photos do not disappear permanently or immediately. FTC ordered the messaging app to pay large settlement in a lawsuit that alleged that messages do not get erased permanently or immediately. Here Facebook has a opportunity to develop a chat app which is completely deletes photos and messages.
ValueWalk's Raul Panganiban interviews Kirk Du Plessis, Founder and CEO of Option Alpha, and discuss Option Alpha and his general approach to investing. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors. Interview with Option Alpha's Kirk Du Plessis
Chat apps threat to Facebook
According to analysts, Facebook Inc (NASDAQ:FB) will gradually face competition from chat apps such as WeChat, line and Kakao Talk, as all these chat apps are popular among the younger users, whereas Facebook’s share has dropped slightly in the category.
Geoff Blaber, mobile analyst at CCS Insight, said, “Snapchat over-indexes with the very segment where Facebook has cited falling engagement: teenagers.” The analyst added that the company needs to release new features either organically or by acquisition to maintain its user engagements. Snapchat has added some new features to include text messaging and video calling apart from sending short videos or photos. Snapchat took the teenager segment by storm, and teachers admitted that they had to confiscate student’s smartphones in the United States given disturbances in class.
Tracie Schroeder, a Kansas high-school science teacher, said that in her 16 year career, she had not seen anything that has disrupted her classroom more than today’s Snapchat.