Facebook will increasingly shift its focus away from public posts to encrypted, ephemeral communications on its trio of messaging apps, CEO Mark Zuckerberg said today.
“As I think about the future of the internet, I believe a privacy-focused communications platform will become even more important than today’s open platforms,”
Zuckerberg writes. “Today we already see that private messaging, ephemeral stories, and small groups are by far the fastest growing areas of online communication.”
Facebook shares rose 0.7 percent on Wednesday. Shares in Snap Inc, which owns messaging app Snapchat, ended down more than 2 percent.
The privacy push given the company does not have a “strong reputation for building privacy protective services.” said Zuckerberg.
Facebook, the Game Player:
Facebook is one of the biggest global players in private messaging with its WhatsApp, Messenger and Instagram, each used by more than 1 billion people. Only WhatsApp fully secures message content from all outsiders, including Facebook itself.
Police have raised concerns about introducing similar security to the other services because they would no longer be able to access online chat records to track religious extremists or other perpetrators.
Regulators have called for Facebook to increase moderation of user content, but more encryption would make it difficult to view and track problematic posts.
The Advantages of Encrypted Chats:
Encrypted conversations also limit Facebook’s ability to send targeted advertisements. Facebook may need to look for new ways to insert itself between businesses and consumers to generate revenue.
Tencent Holdings WeChat app has shown how a messaging service can generate revenue through not only displaying ads, but also being a marketplace for games, merchandise and services such as taxi rides.
Facebook has encouraged messaging conversations between businesses and consumers since at least 2016 but has not disclosed its revenue from the efforts.
Zuckerberg said on Wednesday that “significant thought” still needs to go into integrating commerce into messaging.
James Cordwell, a financial analyst at Atlantic Equities, said Facebook’s strategy risks undercutting its current way of making money.
“But if they can pull off this WeChat-esque strategy,” he said, “it could open up material revenue streams beyond just advertising, something that investors have been craving for quite some time.”