Facebook FB has unveiled new features to its main platform which are again heavily inspired by Snapchat SNAP.
In a blog post, Facebook stated that it is unveiling three new features called Camera Effects, Stories and Direct. With Camera Effects, Facebook users can tap the camera icon on the top left of the app to upload their photos and videos and can also add masks, frames and interactive filters.
Facebook has collaborated with several brands to create masks based on upcoming releases like Guardians of the Galaxy Vol. 2, Power Rangers, Alien: Covenant, Despicable Me 3, Smurfs: The Lost Village and Wonder Woman.
Facebook, Inc. Price
Facebook, Inc. Price | Facebook, Inc. Quote
Last year, the company had added the “Stories” feature—a slideshow of photos and videos that vanishes after 24 hours—to its photo sharing app, Instagram. This was a blatant rip off of Snapchat’s hallmark feature of the same name. “Stories” on Instagram has proved to be a massive hit, with 150 million daily actives. It has also launched the same on Messenger. This time around, Facebook has launched the feature on its main platform. Users can now add their stories by tapping on “Your Story” icon in the Stories bar at the top of News Feed.
Lastly, “Direct” enables users to share photos and videos with specific friends for short duration. Facebook adds that “your friends will be able to view it once and replay it or write a reply. Once the conversation on the photo or video ends, the content is no longer visible in Direct.”
The question arises as to why Facebook, the world’s largest social media service, needs to imitate Snapchat. The latter is one of the most popular messaging and social media apps in the U.S. Launched in 2012, it is extremely popular with teens and millennials, primarily because of ephemerality. Photos/videos and texts sent to friends via Snapchat disappear after some time. Moreover, an interactive style of chat developed by the addition of features like stickers and doodling has really caught the fancy of teens.
Since then, Snapchat has been offering some serious competition in terms of attracting teenagers/young adults to its platform. Consequently, Facebook has started to mimic its features so as to boost user growth and engagement levels.
Now, analysts have observed that Facebook can easily take chances by unveiling features that are similar to other social media services. This is because if these “inspired” features do not work, it can easily roll them back like it has done previously with Poke, Slingshot and Bolt. After all, platforms like Facebook, Instagram, WhatsApp and Messenger do have their own inherent features that will prevent them from losing users.
On the other hand, if the features become successful, like Facebook Live (inspired heavily by Twitter’s TWTR Periscope), it can boost revenues considerably. Online video is the most lucrative component of digital advertising. As video ads generate more revenues than its photo and text-based counterparts, Facebook is trying to incorporate more and more video oriented content to bring in more ad dollars.
Notably, Snap shares took a massive beating following Facebook’s announcement. Shares fell 7% in yesterday’s trading session. Many analysts observe that Snap’s user growth deceleration might have been due to the massive popularity of Instagram’s “Stories.” Snap had a spectacular debut but since then, has failed to keep momentum. The company was initially assigned a sell rating by most analysts. However, recently most underwriter banks, including Citigroup C, Credit Suisse and Goldman Sachs have rated the stock a buy.
The ratings have definitely baffled many as these go against the general Wall Street sentiment about Snapchat, i.e, a bearish outlook. There is an obvious hint of prejudice. Nevertheless, Fortune has asked to be cautious as these underwriters have much more access to inside information and hence the ratings aren’t to be dismissed outright.
Zacks Rank & Stock Price Movement
At present, Facebook has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. In the past year, Facebook shares have gone up 23.59% compared with the Zacks Internet Services industry’s gain of 7.00%.
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