Facebook Now Requires New Messenger Users to Link Account

Facebook, Inc. Price and Consensus

Facebook, Inc. price-consensus-chart | Facebook, Inc. Quote

Facebook’s Interoperability Initiatives Across Services

Facebook’s goal is to allow its users to use any of the three apps (WhatsApp, Instagram, and Messenger) to reach anyone in their contact list, without having to register for all three services.

Moreover, the move appears to be among Facebook’s plan of unifying all its services to create a privacy-focused communications platform. The company is focused on initiatives like private group chats and person-to-person communications instead of the news feed style of public broadcast Facebook is known for.

Additionally, Facebook aims to operate the three services on the same infrastructure in order to have a cross-platform chat service with end-to-end encryption, per a company report.

Thus, linkage of messenger to a Facebook account may enable easier encryption across the entire social network.

However, Federal officials are considering seeking a preliminary injunction against Facebook over antitrust concerns related to how its products interact, per a Wall Street Journal report. The Federal Trade Commission keeps a tab on Facebook’s policies concerning how it integrates its apps or allows them to work with potential rivals.

Facebook’s Efforts to Keep Competition at Bay

Facebook’s initiatives towards data protection and privacy issues are expected to attract old and new users and help it compete with rivals like Apple’s AAPL iMessage.

Notably, Apple’s iMessage, the leading messaging app in the United States, is already an end-to-end encrypted service. Moreover, multiple messaging apps such as Telegram (now at 200 million monthly active users), Signal and Wire among others have been able to increase the size of their user base by promising full end-to-end encryption and greater user privacy on their platforms.

Nevertheless, a common Facebook account linkage across service apps will provide Facebook with consolidated user information from all platforms.

Moreover, the company’s user base of more than 2.7 billion (including its Family of services — Instagram, WhatsApp and Messenger) presents a large canvas for advertisers and makes the platform highly attractive.

Notably, Facebook Messenger’s vast user base of more than 1.3 billion is expected to further attract ad revenues. Featured advertisements allow businesses to earn revenues through sales increase and provide customer service through Messenger. Reportedly, 20 billion messages are exchanged between people and businesses every month.

Zacks Rank & Stocks to Consider

Currently, Facebook carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader Computer & Technology sector are Zendesk ZEN and Remini Street RMNI, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Zendesk and Remini is currently pegged at 29.5% and 25%, respectively.

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