Facebook

Facebook buys Vidpresso’s team and tech to make video interactive

Posted by | Apps, Exit, Facebook, Facebook Video, M&A, Media, Mobile, Social, Startups, TC, vidpresso | No Comments

Zombie-like passive consumption of static video is both unhealthy for viewers and undifferentiated for the tech giants that power it. That’s set Facebook on a mission to make video interactive, full of conversation with broadcasters and fellow viewers. It’s racing against Twitch, YouTube, Twitter and Snapchat to become where people watch together and don’t feel like asocial slugs afterward.

That’s why Facebook today told TechCrunch that it’s acqui-hired Vidpresso, buying its seven-person team and its technology but not the company itself. The six-year-old Utah startup works with TV broadcasters and content publishers to make their online videos more interactive with on-screen social media polling and comments, graphics and live broadcasting integrated with Facebook, YouTube, Periscope and more. The goal appears to be to equip independent social media creators with the same tools these traditional outlets use so they can make authentic but polished video for the Facebook platform.

Financial terms of the deal weren’t disclosed, but it wouldn’t have taken a huge price for the deal to be a success for the startup. Vidpresso had only raised a $120,00 in seed capital from Y Combinator in 2014, plus some angel funding. By 2016, it was telling hiring prospects that it was profitable, but also that, “We will not be selling the company unless some insane whatsapp like thing happened. We’re building a forever biz, not a flip.” So either Vidpresso lowered its bar for an exit or Facebook made coming aboard worth its while.

For now, Vidpresso clients and partners like KTXL, Univision, BuzzFeed, Turner Sports, Nasdaq, TED, NBC and others will continue to be able to use its services. A Facebook spokesperson confirmed that customers will work with the Vidpresso team at Facebook, who are joining its offices in Menlo Park, London and LA. That means Facebook is at least temporarily becoming a provider of enterprise video services. But Facebook confirms it won’t charge Vidpresso clients, so they’ll be getting its services for free from now on. Whether Facebook eventually turns away old clients or stops integrating with competing video platforms like Twitch and YouTube remains to be seen. For now, it’s giving Vidpresso a much more dignified end than the sudden shutdowns some tech giants impose on their acquisitions.

We’ve had a lot of false starts along the way . . . We finally landed on helping create high quality broadcasts back on social media, but we still haven’t realized the full vision yet. That’s why we’re joining Facebook,” the Vidpresso team writes. “This gives us the best opportunity to accelerate our vision and offer a simple way for creators, publishers, and broadcasters to use social media in live video at a high quality level . . . By joining Facebook, we’ll be able to offer our tools to a much broader audience than just our A-list publishing partners. Eventually, it’ll allow us to put these tools in the hands of creators, so they can focus on their content, and have it look great, without spending lots of time or money to do so.”

Facebook Live has seen 3.5 billion broadcasts to date, and they get six times as many interactions as traditional videos. But beyond public figures, game streamers, and the odd moment of citizen journalism, it’s become clear that most users don’t have compelling enough content to stream. Interactivity could take some pressure off the broadcaster by letting the audience chip in.

Facebook already has some interactive video experiments out in the wild. For users, it recently rolled out its Watch Party tool for letting Groups view and chat about videos together. It’s also trying new games like Lip Sync Live and a Talent Show feature where users submit videos of them singing. For creators, Facebook now let streamers earn tips with its new Stars virtual currency, and lets fans subscribe to donating money to their favorite video makers like on Patreon. And on the publisher side, Facebook Live has also built tools to help publishers pull in social media content. It’s even got an interactive video API that it’s developing to allow developers to launch their own HQ Trivia-game shows.

But the last line of Vidpresso’s announcement above explains Facebook’s intentions here, and also why it didn’t just try to build the tools itself. It doesn’t just want established news publishers and TV studios making video for its platform. It wants semi-pro creators to be able to broadcast snazzy videos with graphics, comments and polls that can aesthetically compete with “big video” but that feel more natural. This focus on creators over news outlets aligns with reports of Facebooks head of journalist relations Campbell Brown allegedly saying that Mark Zuckerberg doesn’t care about publishers and that “We are not interested in talking to you about your traffic and referrals any more. That is the old world and there is no going back.” Facebook has contested these reports.

Every internet platform is wising up to the fact that web-native creators who grew up on their sites often create the most compelling content and the most fervent fan bases. Whichever video hub offers the best audience growth, creative expression tools and monetization options will become the preferred destination for creators’ work, and their audiences will follow. Vidpresso could help these creators look more like TV anchors than selfie monologuers, but also help them earn money by integrating brand graphics and tie-ins. Facebook couldn’t risk another tech giant buying up Vidpresso and gaining an edge, or wasting time trying to build interactive video technology and expertise from scratch.

Powered by WPeMatico

Musical.ly investor bets on internet radio with $17M deal for Korea’s Spoon Radio

Posted by | Altruist, Apps, Asia, bubble motion, bytedance, djs, Facebook, Fundings & Exits, goodwater capital, instagram, Internet Radio, Japan, korea, Media, Mobile, musical.ly, Singapore, Software, Southeast Asia, Twitter, vietnam | No Comments

One of the early backers of Musical.ly, the short video app that was acquired for $1 billion, is making a major bet that internet radio is one of the next big trends in media.

Goodwater Capital, one of a number of backers that won big when ByteDance acquired Musical.ly last year, has joined forces with Korean duo Softbank Ventures and KB Investment to invest $17 million into Korea’s Spoon Radio. The deal is a Series B for parent company Mykoon, which operates Spoon Radio and previously developed an unsuccessful smartphone battery sharing service.

That’s much like Musical.ly, which famously pivoted to a karaoke app after failing to build an education service.

“We decided to create a service, now known as Spoon Radio, that was inspired by what gave us hope when [previous venture] ‘Plugger’ failed to take off. We wanted to create a service that allowed people to truly connect and share their thoughts with others on everyday, real-life issues like the ups and downs of personal relationships, money, and work.

“Unlike Facebook and Instagram where people pretend to have perfect lives, we wanted to create an accessible space for people to find and interact with influencers that they could relate with on a real and personal level through an audio and pseudo-anonymous format,” Mykoon CEO Neil Choi told TechCrunch via email.

Choi started the company in 2013 with fellow co-founders Choi Hyuk jun and Hee-jae Lee, and today Spoon Radio operates much like an internet radio station.

Users can tune in to talk show or music DJs, and leave comments and make requests in real-time. The service also allows users to broadcast themselves and, like live-streaming, broadcasters — or DJs, as they are called — can monetize by receiving stickers and other virtual gifts from their audience.

Spoon Radio claims 2.5 million downloads and “tens of millions” of audio broadcasts uploaded each day. Most of that userbase is in Korea, but the company said it is seeing growth in markets like Japan, Indonesia and Vietnam. In response to that growth — which Choi said is over 1,000 percent year-on-year — this funding will be used to invest in expanding the service in Southeast Asia, the rest of Asia and beyond.

Audio social media isn’t a new concept.

Singapore’s Bubble Motion raised close to $40 million from investors but it was sold in an underwhelming and undisclosed deal in 2014. Reportedly that was after the firm had failed to find a buyer and been ready to liquidate its assets. Altruist, the India-based mobile services company that bought Bubble Motion has done little to the service. Most changes have been bug fixes and the iOS app, for example, has not been updated for nearly a year.

Things have changed in the last four years, with smartphone growth surging across Asia and worldwide. That could mean different fortunes but there are also differences between the two in terms of strategy.

Bubbly was run like a social network — a ‘Twitter for voice’ — whereas Spoon Radio is focused on a consumption-based model that, as the name suggests, mirrors traditional radio.

“This is mobile consumer internet at its best,” Eric Kim, one of Goodwater Capital’s two founding partners, told TechCrunch in an interview. “Spoon Radio is taking an offline experience that exists in classic radio and making it even better.”

Kim admitted that when he first used the service he didn’t see the appeal — he claimed the same was true for Musical.ly — but he said he changed his tune after talking to listeners and using Spoon Radio. He said it reminded him of being a kid growing up in the U.S. and listening to radio shows avidly.

“It’s a really interesting phenomenon taking off in Asia because of smartphone growth and people being keen for content, but not always able to get video content. It was a net new behavior that we’d never seen before… Musical.ly was in the same bracket as net new content for the new generation, we’ve been paying attention to this category broadly,” Kim — whose firm’s other Korean investments include chat app giant Kakao and fintech startup Toss — explained.

Powered by WPeMatico

Facebook builds its own AR games for Messenger video chat

Posted by | Apps, augmented reality, Augmented Reality Games, Developer, Facebook, facebook messenger, Facebook Messenger Instant Games, Gaming, Mobile, Snapchat Snappables, Social, TC | No Comments

Facebook is diving deeper into in-house game development with the launch of its own version of Snapchat’s multiplayer augmented reality video chat games. Today, Facebook Messenger globally launches its first two AR video chat games that you can play with up to six people.

“Don’t Smile” is like a staring contest that detects if you grin, and then uses AR to contort your face into an exaggerated Joker’s smirk while awarding your opponent the win. “Asteroids Attack” sees you move your face around to navigate a space ship, avoiding rocks and grabbing laser beam powerups. Soon, Facebook also plans to launch “Beach Bump” for passing an AR ball back and forth, and a “Kitten Craze” cat matching game. To play the games, you start a video chat, hit the star button to open the filter menu, then select one of the games. You can snap and share screenshots to your chat thread while you play.

The games are effectively a way to pass the time while you video chat, rather than something you’d ever play on your own. They could be a hit with parents and grandparents who are away and want to spend time with a kid…who isn’t exactly the best conversationalist.

Facebook tells me it built these games itself using the AR Studio tool it launched last year to let developers create their own AR face filters. When asked if game development would be available to everyone through AR studio, a spokesperson told me, “Not today, but we’ve seen successful short-session AR games developed by the creator community and are always looking out for ways to bring the best AR content to the FB family of apps.”

For now, there will be no ads, sponsored branding or in-app purchases in Messenger’s video chat games. But those all offer opportunities for Facebook and potentially outside developers to earn money. Facebook could easily show an ad interstitial between game rounds, let brands build games to promote movie releases or product launches or let you buy powerups to beat friends or cosmetically upgrade your in-game face.

Snapchat’s Snappables games launched in April

The games feel less polished than the launch titles for Snapchat’s Snappables gaming platform that launched in April. Snapchat focused on taking over your whole screen with augmented reality, transporting you into space or a disco dance hall. Facebook’s games merely overlay a few graphics on the world around you. But Facebook’s games are more purposefully designed for split-screen multiplayer. Snapchat is reportedly building its own third-party game development platform, but it seems Facebook wanted to get the drop on it.

The AR video chat games live separately from the Messenger Instant Games platform the company launched last year. These include arcade classics and new mobile titles that users can play by themselves and challenge friends over high-scores. Facebook now allows developers of Instant Games to monetize with in-app purchases and ads, foreshadowing what could come to AR video chat games.

Facebook has rarely developed its own games. It did build a few mini-games, like an arcade pop-a-shot style basketball game and a soccer game to show off what the Messenger Instant Games platform could become. But typically it’s stuck to letting outside developers lead. Here, it may be trying to set examples of what developers should build before actually spawning a platform around video chat games.

Now with more than 1.3 billion users, Facebook Messenger is seeking more ways to keep people engaged. Having already devoured many people’s one-on-one utility chats, it’s fun group chats, video calling and gaming that could get people spending more time in the app.

Powered by WPeMatico

There’s more: Google is also said to be developing a censored news app for China

Posted by | Android, app-store, Apps, artificial intelligence, Asia, Beijing, bytedance, censorshit, China, cloning, computing, Facebook, files go, Google, internet service, JD.com, search app, search engine, Software, Tencent, Toutiao, United States, WeChat, world wide web | No Comments

Can Google’s week get any worse? Less than a day after the revelation that it is planning a censored search engine for China, so comes another: the U.S. firm is said to be developing a government-friendly news app for the country, where its search engine and other services remain blocked.

That’s according to The Information which reports that Google is essentially cloning Toutiao, the hugely popular app from new media startup ByteDance, in a bid to get back into the country and the minds of its 700 million mobile internet users. Like Toutiao, the app would apparently use AI and algorithms to serve stories to readers — as opposed to real-life human editors — while it too would be designed to work within the bounds of Chinese internet censorship.

That last part is interesting because ByteDance and other news apps have gotten into trouble from the government for failing to adequately police the content shared on their platforms. That’s resulted in some app store suspensions, but the saga itself is a rite of passage for any internet service that has gained mainstream option, so there’s a silver lining in there. But the point for Google is that policing this content is not as easy as it may seem.

The Information said the news app is slated for release before the search app, the existence of which was revealed yesterday, but sources told the publication that the ongoing U.S.-China trade war has made things complicated. Specifically, Google executives have “struggled to further engage” China’s internet censor, a key component for the release of an app in China from an overseas company.

There’s plenty of context to this, as I wrote yesterday:

The Intercept’s report comes less than a week after Facebook briefly received approval to operate a subsidiary on Chinese soil. Its license was, however, revoked as news of the approval broke. The company said it had planned to open an innovation center, but it isn’t clear whether that will be possible now.

Facebook previously built a censorship-friendly tool that could be deployed in China.

While its U.S. peer has struggled to get a read on China, Google has been noticeably increasing its presence in the country over the past year or so.

The company has opened an AI lab in Beijing, been part of investment rounds for Chinese companies, including a $550 million deal with JD.com, and inked a partnership with Tencent. It has also launched products, with a file management service for Android distributed via third-party app stores and, most recently, its first mini program for Tencent’s popular WeChat messaging app.

As for Google, the company pointed us to the same statement it issued yesterday:

We provide a number of mobile apps in China, such as Google Translate and Files Go, help Chinese developers, and have made significant investments in Chinese companies like JD.com. But we don’t comment on speculation about future plans.

Despite two-for-one value on that PR message, this is a disaster. Plotting to collude with governments to censor the internet never goes down well, especially in double helpings.

Powered by WPeMatico

Facebook and Instagram now show how many minutes you use them

Posted by | Apps, Facebook, instagram, Instagram Usage Insights, Mobile, Social, TC, Time Well Spent | No Comments

It’s passive zombie-feed scrolling, not active communication with friends, that hurts our health, according to studies Facebook has been pointing to for the last seven months. Yet it’s treating all our social networking the same with today’s launch of its digital well-being screen-time management dashboards for Facebook and Instagram in the U.S. before rolling them out to everyone in the coming weeks.

Giving users a raw count of the minutes they’ve spent in their apps each day in the last week plus their average across the week is a good start to making users more mindful. But by burying them largely out of sight, giving them no real way to compel less usage and not distinguishing between passive and active behavior, they seem destined to be ignored while missing the point the company itself stresses.

TechCrunch scooped the designs of the two separate but identical Instagram and Facebook tools over the past few months thanks to screenshots from the apps’ code generated by Jane Manchun Wong. What’s launching today is what we saw, with the dashboards located in Facebook’s “Settings” -> “Your Time On Facebook” and Instagram’s “Settings” -> “Your Activity.”

Unfortunately, you’ll only see info about your usage on the mobile app on that device. It won’t include your minutes spent on desktop, where these features don’t appear, what you do on your tablet or info about your usage across the Facebook family of apps. There are no benchmarks about how long other people your age or in your country spend in the apps. All of these would make nice improvements to the dashboards.

Beyond the daily and average minute counts, you can set a daily “limit” in minutes, after which either app will send you a reminder that you’ve crossed your self-imposed threshold. But they won’t stop you from browsing and liking, or force you to dig into the Settings menu to extend your limit. You’ll need the willpower to cut yourself off. The tools also let you mute push notifications (you’ll still see in-app alerts), but only for as much as 8 hours. If you want anything more permanent, you’ll have to dig into their separate push notification options menu or your phone’s settings.

The announcement follows Instagram CEO Kevin Systrom’s comments about our original scoop, where he tweeted “It’s true . . . We’re building tools that will help the IG community know more about the time they spend on Instagram – any time should be positive and intentional . . . Understanding how time online impacts people is important, and it’s the responsibility of all companies to be honest about this. We want to be part of the solution. I take that responsibility seriously.”

Users got their first taste of Instagram trying to curtail overuse with its “You’re All Caught Up” notices that show when you’ve seen all your feed posts from the past two days. Both apps will now provide callouts to users teaching them about the new activity-monitoring tools. Facebook says it has no plans to use whether you open the tools or set daily limits to target ads. It will track how people use the tools to tweak the designs, but it sounds like that’s more about what time increments to show in the Daily Reminder and Mute Notifications options than drastic strengthening of their muscle. Facebook will quietly keep a tiny fraction of users from getting the features to measure if the launch impacts behavior.

“It’s really important for people who use Instagram and Facebook that the time they spend with us is time well spent,” Ameet Ranadive, Instagram’s Product Director of Well-Being, told reporters on a conference call. “There may be some trade-off with other metrics for the company and that’s a trade-off we’re willing to live with, because in the longer term we think this is important to the community and we’re willing to invest in it.”

Facebook needs stronger screen time tools that deter passive browsing

Facebook has already felt some of the brunt of that trade-off. It’s been trying to improve digital well-being by showing fewer low-quality viral videos and clickbait news stories, and more from your friends since a big algorithm change in January. That’s contributed to a flatlining of its growth in North America, and even a temporary drop of 700,000 users early this year, while it also lost 1 million users in Europe this past quarter. That led to Facebook’s slowest user growth rates in history, triggering a 20 percent, $120 billion market cap drop in its share price. “The changes to the News Feed back in January were one step . . . giving people a sense of their time so they’re more mindful of it is the second step,” says Ranadive.

The fact that Facebook is willing to put its finances on the line for digital well-being is a great step. It’s a smart long-term business decision, too. If we feel good about our overall usage, we won’t ditch the apps entirely and could keep seeing their ads for another decade. But it’s likely to be changes to the Facebook and Instagram feeds that prioritize content you’ll comment on rather than look at and silently scroll past that will contribute more to healthy social networking than today’s toothless tools.

While iOS 12’s Screen Time and Android’s new Digital Wellbeing features both count your minutes on different apps too, they offer more drastic ways to enforce your own good intentions. iOS will deliver a weekly usage report to remind you the features exist. Android’s is best-in-class because it grays out an app’s icon and requires you to open your settings to unlock an app after you exceed your daily limit.

iOS Screen Time (left) and Android Digital Wellbeing (right)

To live up to the responsibility Systrom promised, Facebook and Instagram will have to do more to actually keep us mindful of the time we spend in their apps and help us help ourselves. Let us actually lock ourselves out of the apps, turn them grayscale, fade their app icons or persistently show our minute count onscreen once we pass our limit. Anything to make being healthy on their apps something you can’t just ignore like any other push notification.

Or follow the research and have the dashboards actually divide our sharing, commenting and messaging time from our feed scrolling, Stories tapping, video watching and photo stalking. The whole point is that social networking isn’t all bad, but there are behaviors that hurt. Most of us aren’t going to give up Facebook and Instagram. Even just trying to spend less time on them is difficult. But by guiding us toward the activities that interconnect us rather than isolate us, Facebook could get us to shift our time in the right direction.

Powered by WPeMatico

Why unskippable Stories ads could revive Facebook

Posted by | Advertising Tech, Apps, Facebook, Facebook ads, Facebook Earnings Q2 2018, Facebook Stories, Instagram Stories, Media, Mobile, Opinion, Snapchat Ads, snapchat stories, Social, stories, TC | No Comments

Prepare for the invasion of the unskippables. If the Stories social media slideshow format is the future of mobile TV, it’s going to end up with commercials. Users won’t love them. And done wrong they could pester people away from spending so much time watching what friends do day-to-day. But there’s no way Facebook and its family of apps will keep letting us fast-forward past Stories ads just a split-second after they appear on our screens.

We’re on the cusp of the shift to Stories. Facebook estimates that across social media apps, sharing to Stories will surpass sharing through feeds some time in 2019. One big reason is they don’t take a ton of thought to create. Hold up your phone, shoot a photo or short video and you’ve instantly got immersive, eye-catching, full-screen content. And you never had to think.

Facebook CPO Chris Cox at F8 2018 charts the rise of Stories that will see the format surpass feed sharing in 2019

Unlike text, which requires pre-meditated reflection that can be daunting to some, Stories are point and shoot. They don’t even require a caption. Sure, if you’re witty or artistic you can embellish them with all sorts of commentary and creativity. They can be a way to project your inner monologue over the outside world. But the base level of effort necessary to make a Story is arguably less than sharing a status update. That’s helped Stories rocket to more than 1.3 billion daily users across Facebook’s apps and Snapchat.

The problem, at least for Facebook, is that monetizing the News Feed with status-style ads was a lot more straightforward. Those ads, which have fueled Facebook’s ascent to earning $13 billion in revenue and $5 billion in profit per quarter, were ostensibly old-school banners. Text, tiny photo and a link. Advertisers have grown accustomed to them over 20 years of practice. Even small businesses on a tight budget could make these ads. And it at least took users a second to scroll past them — just long enough to make them occasionally effective at implanting a brand or tempting a click.

Stories, and Stories ads, are fundamentally different. They require big, tantalizing photos at a minimum, or preferably stylish video that lasts five to 15 seconds. That’s a huge upward creative leap for advertisers to make, particularly small businesses that’ll have trouble shooting that polished content themselves. Rather than displaying a splayed out preview of a link, users typically have to swipe up or tap a smaller section of a Story ad to click through.

And Stories are inherently skippable. Users have learned to rapidly tap to progress slide by slide through friends’ Stories, especially when racing through those with too many posts or that come from more distant acquaintances. People are quick with the trigger finger the moment they’re bored, especially if it’s with an ad.

A new type of ad blindness has emerged. Instead of our eyes glazing over as we scroll past, we stare intensely searching for the slightest hint that something isn’t worth our time and should be skipped. A brand name, “sponsored” label, stilted product shot or anything that looks asocial leads us to instantly tap past.

This is why Facebook COO Sheryl Sandberg scared the hell out of investors on the brutal earnings call when she admitted about Stories that, “The question is, will this monetize at the same rate as News Feed? And we honestly don’t know.” It’s a radically new format advertisers will need time to adopt and perfect. Facebook had spent the past year warning that revenue growth would decelerate as it ran out of News Feed ad inventory, but it’d never stressed the danger as what it was: Stories. That contributed to its record-breaking $120 billion share price drop.

The shift from News Feed ads to Stories ads will be a bigger transition than desktop ads to mobile ads for Facebook. Feed ads looked and worked identically, it was just the screen around them changing. Stories ads are an entirely new beast.

Stories ads are a bigger shift than web to mobile

There is one familiar format Stories ads are reminiscent of: television commercials. Before the age of TiVo and DVRs, you had to sit through the commercials to get your next hit of content. I believe the same will eventually be true for Stories, to the tune of billions in revenue for Facebook.

Snapchat is cornered by Facebook’s competition and desperate to avoid missing revenue estimates again. So this week, it rolled out unskippable vertical video ads it actually calls “Commercials” to 100 more advertisers, and they’ll soon be self-serve for buyers. Snap first debuted them in May, though the six-second promos are still only inserted into its longer-form multi-minute premium Shows, not user-generated Stories. A Snap spokesperson said they couldn’t comment on future plans. But I’d expect its stance will inevitably change. Friends’ Stories are interesting enough to compel people to watch through entire ads, so the platform could make us watch.

Snapchat is desperate, and that’s why it’s already working on unskippable ads. If Facebook’s apps like Instagram and WhatsApp were locked in heated battle with Snapchat, I think we’d see more brinkmanship here. Each would hope the other would show unskippable ads first so it could try to steal their pissed-off users.

But Facebook has largely vanquished Snapchat, which has seen user growth sink significantly. Snapchat has 191 million daily users, but Facebook Stories has 150 million, Messenger Stories has 70 million, Instagram Stories has 400 million and WhatsApp Stories (called Status) leads with 450 million. Most people’s friends around the world aren’t posting to Snapchat Stories, so Facebook doesn’t risk pushing users there with overly aggressive ads, except perhaps amongst U.S. teens.

Instagram’s three-slide Stories carousel ads

That’s why I expect we’ll quickly see Facebook start to test unskippable Stories ads. They’ll likely be heavily capped at first, to maybe one to three per day per user. Facebook took a similar approach to slowly rolling out auto-play video News Feed ads back in 2014. And Facebook’s apps will probably only show them after a friend’s story before your next pal’s, in-between rather than as dreaded pre-rolls. Instagram already offers carousel Stories ads with up to three slides instead of one, so users have to tap three times to blow past them.

An Instagram spokesperson told me they had “no plans to share right now” about unskippable ads, and a Facebook spokesperson said “We don’t have any plans to test unskippable stories ads on Facebook or Instagram.” But plans can change. A Snap spokesperson noted that unlike a full 30-second TV spot, Snapchat’s Commercials are up to six seconds, which matches an emerging industry trend for mobile video ads. Budweiser recently made some six-second online ads that it also ran on TV, showing the format’s reuseability that could speed up adoption. For brand advertisers not seeking an on-the-spot purchase, they need time to leave an impression.

By making some Stories ads unskippable, Facebook’s apps could charge more while making them more impactful for advertisers. It would also reduce the creative pressure on businesses because they won’t be forced to make that first split-second so flashy so people don’t fast-forward. Employing unskippable ads could also create an incentive for people to pay for a hypothetical ad-free Facebook Premium subscription in the future.

If Facebook makes the Stories ad format work, it has a bright future that contrasts with the doomsday vibes conjured by its share price plummet. Facebook has more than 5X more (duplicated) Stories users across its apps than its nearest competitor Snapchat. The social giant sees libraries full of Stories created each day waiting to be monetized.

Powered by WPeMatico

Facebook loses $120 billion in market cap after awful Q2 earnings

Posted by | Apps, Facebook, Facebook ads, Facebook Earnings, facebook privacy, Facebook Stories, Finance, instagram, Mobile, Snapchat Clone, Social, WhatsApp | No Comments

Facebook’s share price fell over 20 percent in after-hours trading today after the company announced its slowest-ever user growth rate and a scary warning that its revenue growth would rapidly decelerate. Before today’s brutal Q2 earnings, Facebook’s share price closed today at $217.50 – a record high — but fell to around $172 after the earnings call. That’s a market cap drop of roughly $123 billion. In two hours, Facebook lost more value than most startups and even public companies are ever worth.

Here’s the full story on Facebook’s disastrous Q2 2018 earnings:

So why did Facebook’s share price sink like a stone? There are five big reasons:

Slowest-Ever User Growth Rate – Facebook’s monthly user count grew just 1.54, compared to 3.14 last quarter. Daily active users grew even slower at 1.44 percent, compared to 3.42 percent last quarter. For reference, 2.18 percent was its previous slowest DAU growth rate back in Q4 2017. Suddenly hitting this wall could limit Facebook’s total user count over the long-run, and its revenue with it. Facebook tried to distract from these facts by announcing a new “family of apps audience” metric of 2.5 billion people using at least one of its apps, which will hide the shift of users from Facebook to Instagram and WhatsApp.

User Count Shrank In Europe, Flat In US & Canada – Facebook saw its first-ever decline in monthly user count in Europe, from 377 million to 376 million. It got stuck at 241 million in the US & Canada after similarly pausing at 239 million in Q4 2017. Those are Facebook’s two most lucrative markets, with it earning $25.91 per user in North America and $8.76 in Europe. If those markets stall, even swift growth in the Rest Of World region where it earns just $1.91 per user won’t save it.

Decelerating Revenue Growth – Facebook’s revenue grew a remarkable 42 percent year-over-year this quarter. But CFO David Wehner warned that metric would decelerate by high single-digit percentage per quarter over the coming quarters. Wehner said a combination of currency headwinds, new privacy controls, and new experiences like Stories will contribute to the deceleration. This news is what caused Facebook’s share price to drop from -7 percent to `-20 percent.

Privacy And Well-Being – Q2 saw the debut of Europe’s GDPR that forced Facebook to change its privacy policies and get users to agree to how it collects data about them. Wehner blamed GDPR for Facebook loss of users in Europe. That law and Facebook’s Cambridge Analytica scandal led the company to have to improve its privacy controls. These could make it tougher for Facebook to target people with ads or show their content to more people.

Meanwhile, Facebook has continued to adopt the “Time Well Spent” philosophy, removing click-bait news and crappy viral videos that lead to passive internet content consumption that studies say is unhealthy. Instead, Facebook is pushing features like Watch Party where users actively interact with each other. Those might not produce as much time on site and subsequent ad views, but CEO Mark Zuckerberg said the changes are “positive and we’re going to continue in this direction.”

The Shift To Stories – Facebook estimates that by in 2019, sharing via ephemeral vertical Stories slideshows will surpass sharing via feeds. The problem is that advertisers may be slower than users to make that shift. “Will this monetize at the same rate as News Feed? We honestly don’t know” COO Sheryl Sandberg said. Stories ads might be full-screen and more immersive, but they don’t show off links to online stores as well, nor are they as well optimized from decades of banner ad experience by the industry.

Luckily, even though Snapchat invented the Stories format, Facebook has far more people using it each day, with 150 million Stories users on Facebook, 70 million on Messenger, 400 million on Instagram, and 450 million on WhatsApp . If Facebook does manage to figure out Stories ads, it could dominate, but it could take years for its advertiser count and ad prices to rise to offset the shift away from feeds.

Powered by WPeMatico

2.5 billion people use at least one of Facebook’s apps

Posted by | Apps, Facebook, facebook messenger, instagram, Mobile, Social, TC, WhatsApp | No Comments

Facebook is hiding that users are leaving its main app but sticking with Instagram and WhatsApp by publicizing a new metric. Facebook today for the first time announced that in June, 2.5 billion people used at least one of its apps: Facebook, Instagram, WhatsApp, or Messenger. That’s a helpful number because it counts real people, rather than accounts, since people can have multiple accounts on a single app. 2.5 billion people compares to 2.23 billion monthly users on Facebook, 1 billion users on Instagram, 1.5 billion users on WhatsApp, and 1.3 billion users on Messenger.

Mark Zuckerberg announced the new stat on Facebook’s Q2 2018 earnings call following a tough report that saw its user growth slow to its lowest rate ever. Zuckerberg said the 2.5 billion count “Individual people rather than active accounts” which he says “excludes when people have multiple accounts on a single app. And it reflects that many people use more than one of our services.”

It seems as if Facebook announced the stat in hopes of deflecting attention from the fact that its user count shrank in Europe and was flat in the US & Canada, contributing to extraordinarily low monthly and daily user growth. That growth trouble in turn sent Facebook’s share price down over 20 percent in after-hours trading.

On the 2.5 billion stat, Facebook CFO David Wehner explained that “We believe this number better reflects the size of our community.” He also clarified that Facebook’s monthly active user count of 2.23 billion “does count multiple accounts for a single user, and that accounts for 10 percent of Facebook’s MAU” or 223 million.

By bundling the user counts into a “family of apps audience metric”, Facebook can obscure the fact that its core app is hitting a wall. Instead, it can rely on WhatsApp and Instagram to shore up the number. For example, if teens slip from Facebook to Instagram, they’ll still be counted in the new metric. But that doesn’t change the fact that the company’s main money-maker is losing its edge.

Powered by WPeMatico

Facebook stock tanks from mixed Q2 with slowest-ever growth

Posted by | Apps, Facebook, Facebook ads, Facebook Earnings, instagram, Mobile, Social, TC | No Comments

Facebook has hit a wall. The social network succumbed to the public backlash over its handling of fake news, privacy, and digital wellbeing to miss some of Wall Street’s estimates, showing mixed results in its Q2 2018 earnings. GDPR, Mark Zuckerberg’s testimony before congress, and more scandals appear to have contributed to Facebook’s weak user growth.

Facebook reached 2.23 billion monthly users, up just 1.54 percent, much slower than Q1’s 3.14 percent around where its growth rate has hovered for years. Facebook earned $13.23 billion in revenue, missing Thomson Reuters consensus estimates of $13.36 billion, but beat with $1.74 EPS compared to an estimated $1.72 EPS.

User Growth Troubles

Daily active users hit 1.47 billion, up an especially low 1.44 percent percent compared to Q1’s 3.42 percent. For comparison, before now Facebook’s slowest quarter-over-quarter daily user growth rate was 2.18 percent in Q4 2017. In an attempt to deflect attention from its weak user growth, Zuckerberg announced on the earnings call that 2.5 billion people use at least one of its apps: Facebook, Instagram, WhatsApp, or Messenger.

The stock market frowned on the slow growth rates, pushing Facebook’s share price down over 21 percent in after-hours trading to around $170 per share. That’s down from $217.50 when the markets closed. Initially the share price dropped 7 percent on news of slow user growth, but then fell much further when Facebook announced revenue growth would slow significantly in upcoming quarters.

The share price descent comes despite Facebook earning $5.106 billion in profit and revenue being up 42 percent year-over-year. Zuckerberg noted in the earnings release that “Our community and business continue to grow quickly”. And while that’s true if you’re looking year-over-year, Q2 could break that trend.

Facebook’s daily and monthly user counts were up 11 percent year-over-year, confirming that the momentum of its business is still overpowering its PR problems when you zoom out. And its DAU to MAU ratio held firm at 66 pecent, indicating that users are still visiting the site often. But the question for today’s earnings call will be whether time spent on the site has decreased significantly, dragging down revenue with it.

One tough spot for Facebook was that it got stuck at 241 million monthly US & Canada users, the same count as last quarter. After failing to grow in that core market in Q4 2017, it appears that Facebook finally has hit saturation at home after 14 years. And in Europe, Facebook lost 1 million users, sinking to 376 million monthlies. That could be sign that GDPR requirements and the annoying terms of service changes it had to get users to agree to deterred some from browsing. In fact, CFO David Wehner said the failure to grow in Europe was “due to the GDPR.”

Decelerating Revenue Growth

Facebook still managed to boost its average revenue per user in all markets, growing from $23.59 to $25.91 in the US & Canada, showing its targeting continues to improve and competition for ads is strong. But the fact that it’s stopped growing at home could weigh heavily on its share price. Facebook will have to continue to invent more ways to squeeze dollars out of its existing users.

The earnings call saw a worrying warning from Wehner, who said that after 42 percent year-over-year revenue growth this quarter, Facebook expected high single-digit drops each quarter to that metric over the next few quarters. “In terms of what’s driving the deceleration, it’s a combination of factors. First of all there’s currency that’s going from a tailwind to a modest headwind. Secondly, we’re going to be focusing on growing new experiences like Stories . . . and that’s going to have a negative impact on revenue growth. Andd we’re giving people who use the service more choice in terms of privacy.”

Looking back, the quarter saw Facebook clamp down on APIs for developers in hopes of preventing another Cambridge Analytica style disaster. Its CEO faced tough days of questioning from congress over the privacy problem, alleged bias against conservatives, and its failure to protect the 2016 presidential election. Facebook has faced tough questioning from reporters about its approach to fake news and election interference. Facebook tried to redirect attention away from its troubles during its F8 conference that saw it announce plans for a dating feature.

But all the problems may be taking a toll on user engagement, leading to the revenue miss. Weak daily and monthly user growth should be a big concern, and will put even more pressure on Instagram to prop up the corporation.

This article has been updated to reflect announcements from the earnings call.

For more recent Facebook news:

Powered by WPeMatico