Reportedly, Facebook Inc. (FB) is set to launch a new professional version of its social network called Facebook at Work, which in turn is likely to pose threat to the likes of LinkedIn (LNKD) and Microsoft’s (MSFT) Yammer.
Shares of LinkedIn dropped 4.54% ($10.61) to close at $223.28 on Nov 17 following the news.
Currently, the new product is being tested in some selected companies worldwide. However, the exact date for the launch was not revealed. Per sources, initially the service will be without ads and would be available for free. It will be available to employees of those organizations which sign up for the service.
The new tool will resemble the current Facebook pages as far as appearance is concerned. Facebook at Work will enable users to chat with colleagues and collaborate over documents. Per reports, the new service will enable users to keep their professional accounts separate from their personal ones, which we believe is a prerequisite for the success of the service.
We believe that in order to make the new service a success, the social-media giant will have to gain the trust of all those organizations that require protected content.
Currently, Facebook has a huge user base comprising 1.3 billion users worldwide compared to 90 million of its closest rival, LinkedIn. This is indeed an advantage and may as well result in speedier adoption of the new service, giving Facebook an edge over its competitors including the likes of LinkedIn and Yammer.
Moreover, the growing popularity of the Bring Your Own device concept among enterprise users bodes well for Facebook’s professional social marketing product.
However, many enterprises consider socialization to be a source of distraction, which in turn may impede Facebook’s foray into professional networking. Security is another major concern for Facebook. Additionally, stiff competition from Yahoo (YHOO), Twitter (TWTR), LinkedIn and Google (GOOGL) remains a major headwind going forward.
Currently, Facebook has a Zacks Rank #3 (Hold).
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