Thursday, 27 July 2017 07:16

There's a good reason why Facebook to move faster at making money off Messenger say Mark Zuckerberg

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For a company built on the motto, "Move fast and break things," Facebook isn't moving fast enough on monetizing its messaging apps, CEO Mark Zuckerberg said on Wednesday. "I want to see us move a little faster here but I'm confident we're going to get this right," he said during the company's second quarterly conference call with investors. 

Facebook experimented with monetizing Messenger in newfangled ways two years ago by letting businesses create so-called chat bots for the app. But those early bots were buggy and not that useful. Fast forward to 2017, and Facebook has started letting advertisers place more traditional ads inside the app as bots take more of a backseat role.

Zuckerberg said that the top goal for Messenger is still to "make it so that people organically interact with businesses and that is a good interaction for both people and businesses." The app, which has more than one billion users, has made changes to improve the functionality of bots and recently introduced a discover tab for finding businesses.

"This is one of the rare times in business where you can look at messaging platforms that exist and see how they've monetized in other parts of the world and have that be the floor," noted Zuckerberg in an apparent reference to chat apps like WeChat and Line that dominate Asia.

The Asian opportunity
Indeed, messaging ads - both within Messenger and WhatsApp - could provide a perfect vehicle for Facebook to boost its revenue in Asian countries, which lag the US and Europe considerably.

Facebook's average revenue per user in the Asia Pacific region during Q2 was $2.13, compared to $19.38 in the US & Canada. And the ARPU in Asia Pacific is growing at a much slower rate than in the US - up 22% year-over-year in Asia versus a 38% increase in the US.

Messaging ads could also provide a better way to increase revenue from users in the "rest of world" region that's made up of emerging market economies where low-end phones and messaging apps dominate.

Still, Facebook went out of its way to temper expectations about its new money-maker.

CFO David Wehner stressed that there are still a lot of "unknowns" when it comes to messaging-based ads, which he said were different than the newsfeed ads that Facebook gets revenue from on its flagship social network.

And while investors can expect to see money be made from Messenger in the next five years, monetization of WhatsApp's 1.2 billion daily users remains potentially farther off, executives warned.

"It's early days this year, and it's going to continue to be early days for awhile," COO Sheryl Sandberg said. Visit Markets Insider for constantly updated market quotes for individual stocks, ETFs, indices, commodities and currencies traded around the world.

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