Facebook Chat App Threat

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Like any company Facebook continues to have new threats and opportunities at every turn. This looks at a few of these threats. Primarily the rise of the "chat app" phenomenon in the far east (700MM+ users). Will Facebook continue to respond to these threats through acquisition or copying IP or will they innovate?

Transcript of Facebook Chat App Threat

4/25/2013

C O N N E C T I N G T H E D O T S

FACEBOOKANDCHAT APPSaddendum

Thursday, May 2, 13

A SUPPLEMENTAL TO A PREVIOUS PRESENTATION:http://www.slideshare.net/genekeenan1/connecting-the-dots-social-mobile

Gene Keenan

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We believe that some of our users, particularly our younger users, are aware of and actively engaging with other products and services similar to, or as a substitute for, Facebook.

For example, we believe that some of our users have reduced their engagement with Facebook in favor of increased engagement with other products and services such as Instagram. In the event that our users increasingly engage with other products and services, we may experience a decline in user engagement and our business could be harmed.

From Facebooks annual 10-K report filed with the Securities and Exchange Commission in February

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FACEBOOK THREAT DETAILED: WHAT AND WHY

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FACEBOOK CIRCA 2009

Facebook at the center of the universe

everyone uses facebook

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Facebook can only stay relevant for as long as they can connect to the next generation

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All CPG companies know this best but the razor blade companies invented a great hook that pulls in the next generation

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The razor blade hook:You bought the handle that held the razors

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Target knows this well too which is why they figured out how to know if a woman was pregnant.

VALUE: Convert that user to a lifetime customer

http://www.nytimes.com/2012/02/19/magazine/shopping-habits.html?pagewanted=all&_r=0

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WHAT HOOK DOES FACEBOOK USE?

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FACEBOOK CONNECT

FACEBOOK CONNECT

https://developers.facebook.com/blog/post/2008/05/09/announcing-facebook-connect/

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Facebook Connect:Your passport to quickly connecting and logging into any site

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HOW IT WORKS IN THEORY

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FACEBOOK CONNECT

WEB SITES CONNECT TO FACEBOOK

Makes it easier to comment on posts and stories

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LOGIN TO SERVICE/SITE VIA FACEBOOK CONNECT

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FACEBOOK CONNECT | CONNECT TO PASSION SITES

PASSION COMMUNITIES CONNECT TO FACEBOOK TOO

Makes it easier to join communities that focus on individual passions. Easier to share those activities

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CHALLENGE:

OTHER SERVICES NOW OFFER THIS SAME FEATURE

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THIS CREATES COMPETITION FOR ATTENTION:As younger audiences that dont adopt Facebook the connections become even more tenuous

DECLINE ON DEPENDENCE OF FACEBOOK

Login via FB or not or use another service

Login via FB

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THE HARSHER REALITY:FACEBOOK IS NOT A GOOD PLACE

FOR PASSION SPECIFICITY

+

http://www.slideshare.net/genekeenan1/connecting-the-dots-social-mobile

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DO YOU REALLY WANT YOUR ____ SEEING YOUR PASSION FOR ____?

DO YOU REALLY WANT TO SHARE YOUR PASSION FOR____ WITH EVERYONE?

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TO PROVE THE POINT:Bang With Friends

An extreme example of intimate passion networks

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FUELED BY INDIVIDUAL PASSIONS SHARED BY A SELECT GROUP

Anonymity returns

RESULT: ANONYMITY RETURNS

Example: Smaller more intimate group. You can login via FB or create a new account

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FREE AS I WANT TO BE

NOT CONNECTED

But I could be...

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Its really just this all over again...

http://media.tumblr.com/tumblr_mbdugf2qN11rs9uv6.png

New Cliques

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Why Google created CIRCLESand why FB hired Paul Adams away from Google.

BOTH GOOGLE AND FB KNOW THIS

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Paul Adams brings paradigm of Google+ Circles to FB

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What Are The Kids Saying (outside the US)?

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'Facebook is not interesting any more'Young people in Singapore on why they use chat apps

http://www.bbc.co.uk/news/business-21323155

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THE COMING TIDAL WAVE

CHAT applications threatening FB domain

LINE120MM users400k+ a day

WECHAT300MM users

KaKaoTalk70MM users

WhatsAPP200MM+ usersBigger than Twitter

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MOST OF THESE APPS HAVE ONLY BEEN AROUND FOR 2430 MONTHS!

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ITS BIG

BIGGER THAN SMS

Chat applications are bigger than we think.

http://www.bbc.co.uk/news/business-22334338

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CHAT APPLICATIONS ARE SMS REINVENTED FOR A NEW GENERATION

THINK ABOUT IT

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FACEBOOK CHAT HEADS

Why Facebook created FB HOME and Chat Heads:

To staunch the flow of subs to other platforms

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Before they establish too big of a beach head here on their home land

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only eight of the students listed Facebook as their most-used social network. For eleven of them, it didnt rank in the top three (Instagram was by far the mostpopular). Other, more formal surveys have found that Tumblr might actually be the teen social network of choicenow. In fact, Facebook itself even acknowledged the challenge of keeping teens engaged in its annual 10-K report filed with the Securities and Exchange Commission in February. In a list of the risk factors that could affect the companys future success, Facebook stated:

http://business.time.com/2013/03/08/is-facebook-losing-its-cool-some-teens-think-so/#ixzz2S9aPtijB

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RECAP

Concerns over privacy by

mature Facebookers

Less than perfect adoption

by this years teens

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+ Chat applications + + Competing services

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LOOKING FORWARD

Facebook is smart.

They understand these threats.

Watch for future acquisitions from FB if they cant copy their competitors.

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BUT REMEMBER...they will still be up against the inherent limitation of their structure

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Close intimate lasting conversations

Group experiences, exciting but not intimate

Brand X or Artist Y might be a passion point but when that

interaction takes place in Facebook it becomes less authentic because its not

close and intimate

THEY ARE BETTER AT FIREWORKS NOT CAMP FIRES: NOT INTIMATE OR PRIVATE

Chat apps, Path, etc. FACEBOOK

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Thanks for looking

CONTACT:Gene Keenangene@thecollectivefactory.com415-218.7369

http://www.thecollectivefactory.com

For a more in-depth look:http://www.slideshare.net/genekeenan1/connecting-the-dots-social-mobile

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