youth flock to mobile messaging apps may be threat to facebook

SAN FRANCISCO |
Sun Spoil 31, 2013 5:21pm EDT

SAN FRANCISCO (Reuters) – Actualize personal profiles. Body networks of friends. Share photos, videos and air.

That might sound precisely according to Facebook, but hundreds of millions of tech-savvy adolescent bodies accept instead turned to a wave of smartphone-based messaging apps that are any more sweeping across North America, Asia and Europe.

The ardent apps accommodate Kik and Whatsapp, both products of North American startups, as able-bodied as Kakao Inc’s KakaoTalk, NHN Corp’s LINE and Tencent Holdings Ltd’s WeChat, which accept blossomed in Asian markets.

Combining elements of content messaging and social networking, the apps accommodate a abrupt-blaze road for smartphone users to trade everything from brief texts to flirtatious pictures to YouTube clips — bypassing both the SMS plans offered by wireless carriers and established social networks originally designed as websites.

Facebook Inc, with 1 billion users, remains by far the apple’s most popular website, and its stepped-up bull's eye on moving has fabricated it the most-used smartphone app as able-bodied. Still, across Silicon Valley, investors and industry insiders add there is a possibility that the messaging apps could threaten Facebook’s dominance over the abutting few age. The larger ones are even starting to emerge as full-blown “platforms” that can abutment third-affair applications such as games.

To be sure, abounding of those who are using the advanced messaging apps remain on Facebook, indicating there is babyish immediate sign of the giant social media company losing its lock on the marketplace. And at a press accident this week, the company will unveil statement relating to Android, the apple’s most popular smartphone operating system, which could accommodate a advanced version of Android with deeper integration of Facebook messaging tools – or possibly even a Facebook-branded phone.

But the firms that can booty over the messaging apple should be able to accomplish some ample inroads, investors add.

“Accurate interactions are conversational in attributes,” says Affluent Miner, a partner at Google Ventures who invested in San Francisco-based MessageMe, a advanced entrant in the messaging marketplace. “Added bodies content and accomplish phone calls than amuse on to social networks. If one company dominates the replacement of that traffic, then by definition that’s actual ample.”

Facebook spokespeople declined to comment for this article, citing this Thursday’s planned announcement.

Facebook’s ample claiming is reeling back users according to Jacob Robinson, a 15-year aged aerial school student in Newcastle upon Tyne in the U.K., who said the Kik messaging app “blew up” among his friends about six months ago. It has remained the most-used app on his Android phone as it is the easiest road for him to send altered kinds of multimedia for chargeless, which he estimated he does about 200 times a day.

Robinson said he trades snapshots of his homework with friends while they stay up unpunctual studying for their exams — or not.

“We again stay up in bed with our phone all after aphotic, aloof on YouTube searching for a scream videos, then you quickly share it with your friends,” he added. “It’s accessible. You can flip in and out of Kik.”

Facebook “has really started to lose its edge over here,” said Robinson, who activate his interactions on Facebook less absorbing than his absolute-age chats.

Waterloo, Ontario-based Kik has racked up 40 million users since launching in 2010. Silicon Valley entrants in the competition accommodate Whatsapp, funded by Sequoia Chief, and MessageMe, launched earlier this month by a accumulation of viral pastime makers. MessageMe has received seed-stage funding from Accurate Ventures and Aboriginal Round Chief, among others, and claimed 1 million downloads in its aboriginal week.

Meanwhile, Asian companies are producing some of the fastest-growing apps in history. Tencent’s WeChat boasts 400 million users – far added than Twitter, by road of comparison – while LINE and KakaoTalk claim 120 million and 80 million users, respectively. Both accept laid the groundwork to expand into the U.S. marketplace.

MOBILE WAVE

The advance in the messaging apps be resonant the dramatic shift in Internet usage in recent age, as Interlacing visits via desktop computers accept stagnated while smartphone ownership and app downloads accept skyrocketed.

Chief Executive Mark Zuckerberg has publicly called Facebook a “moving company” to accent the company’s priorities. Last year, he splashed $1 billion for photo-sharing app Instagram, which has remained bittersweet ardent, while Facebook again launched its own Messenger app, offering a suite of smartphone communication tools.

Still, Facebook has again been forced to play defense. Earlier this year, the company cut off its data integration with a adolescent startup called Snapchat and then mimicked its aspect with a advanced messaging tool called Poke, which sends messages that self-destruct. It has again shut off its integration with messaging apps according to MessageMe and Voxer.

At the selfsame age, Facebook has again hired graphic artists to haul emoticons and graphics for Messenger that emulate features of the wildly popular Asian apps according to LINE, according to bodies with adeptness of the matter.

Dave Morin, an early Facebook employee who left to activate the “private” social network Path in 2010, said he recognized last summer the critical role of messaging functions in smartphone apps, and quickly began working to incorporate them.

Since Path released a advanced version of its app earlier this month, the figure of Path’s daily users has risen 15 percent, which Morin attributed to the advanced messaging features.

“What’s the figure one astuteness why bodies accept this affair?” said Morin, holding up his iPhone. “It’s to call, to content, to communicate.”

Messaging, Morin added, is “the basis for the moving social network.”

PLATFORM THREAT

While established social networks act to incorporate messaging features, the advanced-wave messaging apps are looking to abound into social networking platforms that abutment a array of features and enable innovations from outside developers.

“The tried and accurate access for a social network is aboriginal you body a network, then you body apps on your own, then you accessible it up to third affair developers,” said Charles Hudson, a partner at early stage adventure chief firm SoftTech VC.

The moves mirror Facebook’s younger days, when its user advance and revenues were boosted by pastime publishers according to Zynga Inc, which fabricated popular games according to FarmVille for the Facebook platform.

In the South Korean marketplace, for instance, eight of the top ten highest grossing Android apps are games built on top of KakaoTalk. Tencent announced in November that it would introduce a moving notecase aspect enabling payment for goods with WeChat. And Tencent again makes almighty dollar in China by using the app’s location data to displaying nearby merchants’ deals to abeyant customers.

If the messaging apps grasp a certain scale, they could anatomy networks that rival Facebook’s “social graph,” the network of user connections and activities that enable highly targeted delivery of content and advertising.

“The folks on your inscription book are actual altered from your Facebook friends and your LinkedIn contacts, and that’s a accustomed abode for a actual able graph to be created,” said Jim Goetz, a partner at Sequoia Chief.

Ted Livingston, the 25-year aged chief executive of Kik, said he developed the capability for his service to abutment foreigner features in November, and he plans to accessible the platform to outside developers in the near approaching.

Livingston said Kik and Whatsapp were “in a competition to beam who’s the aboriginal to body a platform.”

Whatsapp, which has been the most widely downloaded communication app for both iOS and Android in recent months, according to analysis firm App Annie, has been profitable by selling subscriptions to its service for $1 a year. Although it has remained mum about its platform plans, the company has been rumored to be in talks with Asian pastime publishers about hosting games, according to statement reports in South Korea.

Goetz declined to inscription the reports, saying alone that as it relied on a subscription bag model, Whatsapp did not charge to sell games or ads to accomplish almighty dollar.

Still, he said, the Whatsapp accumulation “spends a lot of age thinking about the developer community.”

DEAL POTENTIAL

Established social networking giants could again swoop in for the upstarts – and Facebook has demonstrated its appetite for acquisitions.

Indeed, investors are eyeing a round of potentially lucrative buyouts resembling the series of deals involving accumulation messaging applications in 2011.

Facebook acquired accumulation messaging app Beluga in Airing of that year, enlisting its founders to advice body its own stand alone app, Messenger, which launched six months subsequent.

In unpunctual 2010, Aboriginal Round Chief, an early stage adventure chief firm, invested in GroupMe, a accumulation messaging startup that was sold to Skype aloof fifteen months after it launched.

Kent Goldman, a Aboriginal Round partner who has backed MessageMe, said it was unlikely that the marketplace in the continued chat could abutment abundant independent messaging startups, which by their attributes alter to added able as they abound larger.

“You don’t appetite to be the smallest one when the air stops,” he said.

(Editing by Jonathan Weber, Martin Howell and Chris Reese)

Adolescence flock to moving messaging apps, may be threat to Facebook
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Originall posted April 1, 2013