Facebook’s (FB) recently launched video-chat app Slingshot is now available worldwide. The app is available on Apple's (AAPL) iPhones running iOS 7 and Google’s (GOOGL) Android devices with Jelly Bean or KitKat.
The app has received mix response in the U.S. Despite Facebook’s denial, its close resemblance with Snapchat has been a source of criticism. However, the app carries some unique features that can attract users.
Slingshot intends to enhance customer engagement by not allowing its users to view images sent to them unless they send images in return. Additionally, keeping privacy concerns in mind, it allows one to selectively send pictures to all those who have been “slinged” by them.
However, there are some downsides to the app as well. Slingshot does not give any notification provided one takes a screenshot of the images he sends, a feature that is offered by rival Snapchat.
Per a source, the initiative to launch Slingshot was undertaken by Facebook soon after its efforts to acquire Snapchat failed in Oct 2013. In 2012, Facebook launched a similar video-sharing app known as Poke, which failed to gain popularity and was discontinued earlier this year.
We believe that the release of the app worldwide is a positive for the company. However, investors have to wait and see whether it outdoes Snapchat in terms of usage and popularity.
Currently, Facebook is the world’s largest social media platform with over 1.0 billion monthly visitors. It aims to take this number to 7.0 billion in the near future. However, to do so, it will have to attract users from all age groups.
Stiff competition from Yahoo’s (YHOO) Tumblr, Twitter’s Vine, Kik, Pheed and Snapchat remains a major headwind in this regard. Increased usage of these apps by teenagers poses a serious threat to Facebook’s leading position in the social media space.
However, putting all such threats aside, Facebook still continues to be the most popular social media platform among teenagers in US as per a survey recently conducted by Forrester Research.
We believe that Facebook’s growing mobile user base, Instagram’s increasing popularity, frequent launch of new products and international expansions will boost the company’s top line and profitability. However intensifying competition from Google in the ad revenue market remains a major headwind.
Currently, Facebook has a Zacks Rank #3 (Hold).
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