Wednesday, September 14, 2016

Facebook Inc Messenger Rooms Will Be the Next Big Thing (FB)

Facebook Rooms could mark the return of the chat room

Earlier today, TechCrunch reported that a developer discovered a hidden feature buried in the source code of Facebook Inc’s (NASDAQ:FB) Messenger program. Apparently, the code for Facebook Messenger describes “rooms” that will be used for “public conversations about topics and interests.” FB management, unsurprisingly, declined to comment on the discovery.

Facebook Messenger has received some serious upgrades over the last few years, including the ability to serve as a money transferring service and put you in touch with virtual robots that can make dinner suggestions based on what’s in your pantry.

That being said, the notion of Facebook Rooms — which appear to be nothing more than a modernized version of those old AOL chat rooms we pretend we never used — is surprisingly intriguing.

All things considered, I think the idea has some solid potential. The prevalence of chat rooms has all but disappeared and given way to the forum platform. But, the ability to have a conversation in real-time with a perfect stranger who shares a common interest is definitely something that plenty of Facebook’s user base will surely find attractive.

Coupled with the fact that you no longer need an actual FB account to use Facebook Messenger, the addition of this feature could be just what Zuckerberg was looking for to give his company’s universal communication app the bump it needs to push it to the top of the list.

Of course, this all assumes that my interpretation of the details revealed by TechCrunch’s developer contact is correct. I could be completely off the mark here. But, if I am, what else could those Facebook Rooms be used for?

Will Facebook Messenger Rooms Help FB Stock?

In the short-term, I don’t see how the introduction of Facebook Rooms will have any impact on FB stock. Regardless of what the rooms actually do, they’re not likely to monetize Messenger, at least not to a degree that would move the Facebook stock needle.

In the long run, however, if these rooms are at least close in concept to what I’m imagining, Facebook Messenger could end up being a major revenue generator that could give FB stock a nice boost. Currently, the chat app hasn’t been monetized, but there’s no guarantee it will stay that way. If the Facebook Rooms feature is actually implemented and it draws in a mass of new users, don’t be surprised if Zuckerberg gives the green light for advertisements.

Honestly, I’m surprised it hasn’t happened, yet. With close to 1 billion users, Facebook Messenger could very well be the largest untapped mobile device market anywhere. It would become an even more attractive — nay, irresistible — advertising market if the Facebook Rooms pulls even a fraction of users away from competing chat apps such as WeChat, Line and Hangouts.

Advertisers would be falling all over themselves for the first crack at putting ads on Messenger, and Zuckerberg could charge a small fortune for the privilege. And that my friends, could give a massive boost to FB stock.

Article originally appeared on InvestorPlace (09/14/2016)

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