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Facebook’s mission: Hammer WhatsApp and other messaging startups

Published Apr 4th, 2013 3:15PM EDT
Facebook Home Analysis

Much has been said about what Facebook’s (FB) new initiative means for app developers. But after today’s Facebook Home unveiling, it’s clear that there is one very specific app category that is Facebook’s current obsession: messaging apps. It is safe to say nobody expected two years ago that the popularity of WhatsApp, VINE and KakaoTalk would explode the way it did. WhatsApp hit 11 billion outbound messages on New Year’s Eve; China-driven WeChat has hit 300 million users; Korean KakaoTalk has reached 80 million users. All of these messaging platforms have created a surge of interest in group chats and photo-sharing — features that just happen to encroach on Facebook’s core territory. Even worse, Asian messaging apps have started morphing into social game hubs and WhatsApp is expected to launch an ambitious game initiative later in 2013. Today represented Facebook’s counterattack on these pesky messaging upstarts.

The big problem here is that Facebook is so very late with its move. Kakaotalk already topped 80% market penetration among smartphone users in Korea and WeChat did the same in China. WhatsApp’s market share has reached 80% in a variety of European and Latin American countries ranging from Brazil and Spain to the Netherlands and Germany. Consumers in these markets are locked into tight communities defined by the dominant messaging app.

The most appealing feature of many of these services is how compact and fluid they are. WhatsApp will not lob any ads at you — ever. It’s only messaging and the messaging experience is wrapped into a tight, tidy knot. Can Facebook really duplicate this cleanliness and clarity?

The cancer eating at Facebook’s core web experience is the profusion of ads and pseudo ads that sneakily morph users into marketing vehicles. If you ever Liked Disney, your friends will be bombarded with Disney ads citing your name from here to eternity. Marketing messages creep into the top, middle and sides of every Facebook page.

Is it possible for Facebook to keep its advertising demons in check and create a pure messaging environment experience? I have my suspicions. Public presentations of Facebook products rarely if ever reflect just how intrusive the marketing kudzu has become. Rebuilding the Facebook brand as a vessel that is not tarnished by the unholy sludge of intrusive ads will be a gigantic task.

After launching mobile game company SpringToys tragically early in 2000, Tero Kuittinen spent eight years doing equity research at firms including Alliance Capital and Opstock. He is currently an analyst and VP of North American sales at mobile diagnostics and expense management Alekstra, and has contributed to, Forbes and Business 2.0 Magazine in addition to BGR.