Niagara Gazette

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June 13, 2014

Facebook places multiple bets to win messaging wars

SAN FRANCISCO —

Facebook is adopting a multifront strategy to woo fickle smartphone users who crave a variety of ways to send messages to friends.

The social network has made two big moves in messaging in just the past five months. In February, Facebook agreed to buy startup WhatsApp for $19 billion. This week, it followed up by recruiting eBay's PayPal President David Marcus to run its other messaging efforts including Messenger, which Facebook started requiring people to use for messaging in April.

In an age when e-mail is losing its cachet, especially among the young, Messenger and WhatsApp provide Facebook with different ways into messaging. WhatsApp, which is more popular in Europe and Asia, looks spare and will remain simple, its founders have said. By contrast, Messenger, which has virtual stickers of smiling pandas and other features, may keep expanding on what it offers. Marcus will have the freedom to experiment and try different things with Messenger to differentiate the app, said a person familiar with the matter, who asked not to be identified because the plans are private.

The two apps show how it takes more than one strategy to win in the mobile-messaging market. With twin apps, Facebook can set itself apart from competing programs including Tencent Holdings' WeChat and Naver's Line, which are also making a land grab for consumers and messaging revenue. The services have attracted more than 1 billion users in less than five years, according to a presentation from venture capital firm Kleiner Perkins Caufield & Byers last month.

"It seems like Facebook is going to have two very different approaches," said Scott Kessler, an analyst at S&P Capital IQ. "Facebook acquired WhatsApp because they're successful and should continue doing what they're doing. For Messenger, there's a lot of opportunity for experimentation and for new ways of monetization."

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