Per a recent report by TechCrunch, Facebook Inc. FB is working to bring Instagram Stories to its messaging application WhatsApp that will be posted as a WhatsApp Status.
In August 2016, Facebook added the Stories feature – a slideshow of photos and videos that vanishes after 24 hours – to Instagram. The feature proved to be a massive hit, with 200 million daily active users (DAUs) by April 2017. This prompted Facebook to add the same on Messenger as well as its main platform.
Reportedly, as of November 2017, Instagram Stories, a blatant copy of Snap Inc’s SNAP messaging application Snapchat’s feature of the same name, and WhatsApp Status have more than 300 million DAUs, each almost double that of Snapchat’s total DAU.
The company’s attempt to bring the feature to WhatsApp is aimed at boosting engagement by keeping users more entertained and connected and thereby driving interactions.
Notably, following the news, the share price of the company rallied to a new 52-week high of $184.78, eventually closing a tad lower at $184.67. Facebook has gained 55.6% in the past year, substantially outperforming the industry’s 28.3% rally.
Focus on Driving Social Interactions
On the last conference call, CEO Mark Zuckerberg mentioned that the company aims to “help people connect with each other and build meaningful relationships.” He hopes to achieve this by emphasizing more on the company’s video-based products like Instagram Stories and WhatsApp Status.
Facebook’s intention to capture the opportunity presented by ever-increasing video viewing on social media platforms is evident from the various steps that the company is taking to reach out to a wider audience.
Earlier, the company mentioned the emergence of video as a “megatrend”. The company believes that over the next three years, videos will lead all product lines.
We note that Facebook’s acquisition of WhatsApp in 2014 not only expanded the company’s mobile product lineup but also added a user base, which is predominantly young.
At the same time, the acquisition eliminated Facebook’s fastest-growing competitor in terms of user additions. With an estimated user base of over 1.3 billion, it is one of the most important businesses. WhatsApp now boasts of 1 billion daily actives.
With such enormous popularity of WhatsApp, bringing the Stories feature to the platform will be prudent in our view.
Zacks Rank & Other Stocks to Consider
Facebook carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the broader technology sector are NVIDIA Corporation NVDA and Micron Technology Inc MU, both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
Long-term earnings growth rate for NVIDIA and Micron is projected to be 10.3%and 10%, respectively.
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