Specialist
Former product manager at Facebook Inc
Agenda
- Facebook Messenger's (NASDAQ: FB) offerings and integrations across Facebook's properties
- Growth drivers and potential across geographies around the world
- Competitive landscape, highlighting iMessage (NASDAQ: AAPL), Snapchat (NYSE: SNAP) and WhatsApp, owned by Facebook
- 1-3-year outlook, focusing on opportunities and risks
Questions
1.
People are familiar with Messenger in the context of Facebook on a regular if not a daily basis. 10 years ago or so, Facebook made the decision to separate Messenger as an offering and app, which caused some consternation at the time but now seems to have settled into what is sometimes referred to as Facebook Blue and Facebook Messenger. How do you think Facebook considers Facebook Messenger, given that it is a separate business but with inextricable ties?
2.
You highlighted the notion of messaging apps and particularly Messenger being more private-facing offerings. This has been a theme increasingly discussed by Facebook over the last year or two, presumably given privacy and its accompanying rules and regulations becoming a global focus. To what extent do you think those developments have forced or prompted Facebook to be more focused on Messenger and the opportunities associated with private that it can offer?
3.
You mentioned messaging being a huge category that’s presumably growing substantially and that it is growing faster than the core of social media. What is the overall size and engagement that Messenger has been responsible for? In a survey of US users of a variety of popular chat applications from roughly the end of Q1 2020 to the end of Q1 2021, the highest percentage of people that indicated they regularly used a particular product was for Facebook Messenger. 87% of these surveyed people indicated they used Messenger, the next was FaceTime at around one-third of people and then Zoom around one-third of people as well. How should we think about Messenger’s size and engagement? It’s a relatively small part of such a big company so can get lost.
4.
Messenger doesn’t talk much about its user numbers, whether it’s across DAU [daily active users] or MAU [monthly active users]. Facebook has started talking about consolidated users across all of its different offerings, with people considered users across WhatsApp, Facebook Blue or Instagram. I would say there’s more information suggesting that WhatsApp is a two-billion-user platform, however. The last time Facebook commented publicly on the size of Messenger’s user base was around four years ago. I think it indicated around 1.3 billion users. Do you think it’s reasonable to estimate Messenger has two billion users by now? How important is that for it to continue to gain scale, especially globally?
5.
You suggested that messaging is a winner-takes-all type of market, though you mentioned the US may be a more fragmented exception given that Facebook itself has said 70% of US users use three messaging apps or more. You defined engagement around the number of senders and sends, focusing on that messaging construct. The survey I referenced highlights FaceTime and Zoom, which could perhaps be considered competitors to Messenger, given its video messaging capabilities. I don’t know how widely adopted those are, though uptake and engagement likely increased during the pandemic. How significant is Messenger’s video and audio calling capabilities to overall usage? Facebook has this platform, which I think is much bigger, has much more engagement and has more features and functionality than I think some understand. To what extent are Messenger’s various functions being used en masse?
6.
There’s a lot more to Facebook Messenger than just text-based messaging, despite that function being the dominant feature and how it is overwhelmingly used. I’m not sure if Messenger has the status of an app such as WeChat, which has many different functions and I think people use more as the starting point for what we could call a life operating system. What are your thoughts on Messenger as an application vs a platform? Are the nuances between the use of different apps to do with geography, where perhaps ex-US, people consider
and use these apps more like platforms?
7.
The integration across Facebook and Instagram was formally announced earlier in 2021. Facebook provided an update indicating that more than 60% of Instagram users have connected their messaging via Facebook Messenger. It seems that if people are messaging on Facebook or Instagram, they are predominantly doing so via Messenger. Do you think this is how the company will win the messaging market? It seems Facebook and Messenger users have reached critical mass, so they have to find other ways to attract people. What strategies are being used to win the market if the company is reliant on coalescing around a platform construct to do this? You mentioned the strategies and market positions might vary by geography. What do you think about the US market and what Facebook could and should be doing there?
8.
There has been a shift especially in the US and especially during coronavirus around people becoming increasingly accustomed to and comfortable with interacting with companies though various different types of chat or messaging apps. Messenger already has some capabilities that would be driven by businesses that want to interact in that way, but could that be an avenue that the company increasingly taps into? There are companies such as Zendesk and LivePerson enabling these kinds of conversations, who want to connect with any and all messaging vehicles to make sure that people can reach them how they want. Do you think Facebook considers that a means to increase its market share and engagement? Alternatively, is that just too difficult, because that seems even more fragmented given the different players and dynamics there?
9.
Where do you think Messenger’s use, engagement and monetisation growth comes from? Does that occur mostly ex-US and outside developed countries, given there’s still an upswing in the number of mobile phones and users there and more headroom to monetise? Will this be about specialisation and how different messaging and chat apps and platforms can appeal to people and drive engagement? We discussed the notion of integrations, which seems a major development in the US, especially with Facebook Messenger and Instagram. We also touched on partnerships. What’s your 1-3-year growth outlook and what might be the major drivers?
10.
I think many people have Facebook and Facebook Messenger, but use different texting applications when communicating with people, whether it’s iMessage or something else. You suggested that it’s really hard to change that. Who might Facebook and Messenger consider their top competition? In the US I would imagine that there are a variety of different global players such as Apple and iMessage. It seems Messenger is adopting a lot of Snapchat’s features and functionality. There are apps such as Telegram and Discord which seem to be newly recognised in the marketplace. How do you think about those and others, particularly ex-US?
11.
How would you describe the dynamic for Facebook as a company, between Facebook Messenger and WhatsApp? Facebook can obviously claim to be the leader in a market because it has either Facebook Messenger or WhatsApp as a leader, or the two combined. How do you think Messenger and Facebook think about WhatsApp and the interplay? Some might wonder that if the company has integrated Messenger with Instagram how long until it will do the same with WhatsApp. It would be logical because you would imagine that you have a lot of the same kind of functionality and infrastructure needs.
12.
How do you think Facebook and the Messenger team think about monetisation? There seemed to be a push a couple years ago to talk about features, functionality and businesses getting involved and being able to connect with users. I think there’s very little that’s talked about now, perhaps because the goal is to win these markets, and they can’t be won by cluttering the user experience with advertising.
13.
What’s your 1-3-year outlook for Facebook Messenger and its user volume, engagement, monetisation and revenue growth?
14.
What do you think is Messenger’s US market share based on users? How might this evolve in the next three years?
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