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Attack of the (Social Media) Clones
Facebook may have disappointed investors with its second quarter results and grim outlook on Wednesday, but that doesn’t mean that all is bad in the company’s social media empire. In fact, one of the reasons for the company’s warning of slowing revenue growth in coming quarters is the success of the relatively new Stories format across Facebook’s platforms. First introduced on Instagram in August 2016, the Stories format was heavily “inspired” by one of Snapchat’s most popular features and gradually found its way to all of Facebook’s social media apps.
Both Instagram Stories and WhatsApp Status (which might as well have been named Stories as well) have long surpassed Snapchat in terms of daily active users and Facebook Stories is probably next in line. The ongoing shift towards stories at the expense of feeds in social media poses a new challenge for Facebook, because it’s unclear whether the new format can be monetized as effectively as the news feed. “Will this monetize at the same rate as News Feed? We honestly don’t know”, COO Sheryl Sandberg admitted in Wednesday’s conference call. However, the same was once said about the shift to mobile usage and we all know that Facebook managed that seismic shift exceptionally well.
Facebook Dominates Social Media
Source: Statista
When Facebook filed for its initial public offering in early 2012, the company named the ongoing transition to mobile as one of the biggest risks to its future success. If the transition to mobile was indeed the biggest challenge in Mark Zuckerberg’s early career as CEO of a billion-dollar company, he managed it admirably well.
Not only does Facebook generate most of its revenue with mobile advertising now, the company also owns some of the most popular apps in the world. Earlier this week, Instagram announced that it now has more than one billion monthly active users, making it the fourth platform in Facebook’s portfolio to reach that milestone.
Looking at some of Facebook’s competitors illustrates how hard it is to get to that level of adoption. As Twitter, Snapchat and Pinterest are all struggling to get to 500 million users, it is hard to imagine any of them getting to one billion. But with great power comes great responsibility (just ask Spiderman) and Facebook is currently doing its best to take responsibility for what happens on its namesake platform. On Thursday, the company announced new measures to fight fake news in its continued attempt to rebuild trust after the recent scandals.
