News / Science & Technology

New Mobile Apps Could Pose Threat for Facebook

The Kakao Talk app is popular with teenagers.
The Kakao Talk app is popular with teenagers.
Reuters
Create personal profiles. Build networks of friends. Share photos, videos and music.
That might sound precisely like Facebook, but hundreds of millions of tech-savvy young people have instead turned to a wave of smartphone-based messaging apps that are now sweeping across North America, Asia and Europe.

The hot apps include Kik and Whatsapp, both products of North American startups, as well as Kakao Inc's KakaoTalk, NHN Corp's LINE and Tencent Holdings Ltd's  WeChat, which have blossomed in Asian markets.

Combining elements of text messaging and social networking, the apps provide a quick-fire way 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 world's most popular website, and its stepped-up focus on mobile has made it the most-used smartphone app as well. Still, across Silicon Valley, investors and industry insiders say there is a possibility that the messaging apps could threaten Facebook's dominance over the next few years. The larger ones are even starting to emerge as full-blown "platforms'' that can support third-party applications such as games.

To be sure, many of those who are using the new messaging apps remain on Facebook, indicating there is little immediate sign of the giant social media company losing its lock on the market. And at a press event this week, the company will unveil news relating to Android, the world's most popular smartphone operating system, which could include a new version of Android with deeper integration of Facebook messaging tools - or possibly even a Facebook-branded phone.

But the firms that can take over the messaging world should be able to make some big inroads, investors say.

"True interactions are conversational in nature,'' says Rich Miner, a partner at Google Ventures who invested in San Francisco-based MessageMe, a new entrant in the messaging market. "More people text and make phone calls than get on to social networks. If one company dominates the replacement of that traffic, then by definition that's very big.''

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

Facebook's big challenge is reeling back users like Jacob Robinson, a 15-year old high school student in Newcastle upon Tyne in Britain., 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 because it is the easiest way for him to send different kinds of multimedia for free, which he estimated he does about 200 times a day.

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

"We also stay up in bed with our phone all night, just on YouTube searching for funny videos, then you quickly share it with your friends,'' he added. "It's easy. You can flip in and out of Kik.''

 Facebook "has really started to lose its edge over here,'' said Robinson, who found his interactions on Facebook less interesting than his real-time chats.

Waterloo, Ontario-based Kik has racked up 40 million users since launching in 2010. Silicon Valley entrants in the race include Whatsapp, funded by Sequoia Capital, and MessageMe, launched earlier this month by a group of viral game makers. MessageMe has received seed-stage funding from True Ventures and First Round Capital, among others, and claimed 1 million downloads in its first week.

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

Mobile wave

The growth in the messaging apps reflect the dramatic shift in Internet usage in recent years, as Web visits via desktop computers have stagnated while smartphone ownership and app downloads have skyrocketed.

Facebook CEO Mark Zuckerberg gestures while speaking to the audience during a media event at Facebook headquarters in Menlo Park, California March 7, 2013.Facebook CEO Mark Zuckerberg gestures while speaking to the audience during a media event at Facebook headquarters in Menlo Park, California March 7, 2013.
x
Facebook CEO Mark Zuckerberg gestures while speaking to the audience during a media event at Facebook headquarters in Menlo Park, California March 7, 2013.
Facebook CEO Mark Zuckerberg gestures while speaking to the audience during a media event at Facebook headquarters in Menlo Park, California March 7, 2013.
Chief Executive Mark Zuckerberg has publicly called Facebook a "mobile company'' to emphasize the company's priorities. Last year, he splashed $1 billion for photo-sharing app Instagram, which has remained red hot, while Facebook also launched its own Messenger app, offering a suite of smartphone communication tools.

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

At the same time, Facebook has also hired graphic artists to draw emoticons and graphics for Messenger that emulate features of the wildly popular Asian apps like LINE, according to people with knowledge of the matter.

Dave Morin, an early Facebook employee who left to found 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 new version of its app earlier this month, the number of Path's daily users has risen 15 percent, which Morin attributed to the new messaging features.

"What's the number one reason why people have this thing?'' said Morin, holding up his iPhone. ``It's to call, to text, to communicate.''

Messaging, Morin added, is "the basis for the mobile social network.''

Platform threat

While established social networks move to incorporate messaging features, the new-wave messaging apps are looking to grow into social networking platforms that support a variety of features and enable innovations from outside developers.

"The tried and true approach for a social network is first you build a network, then you build apps on your own, then you open it up to third party developers,'' said Charles Hudson, a partner at early stage venture capital firm SoftTech VC.

The moves mirror Facebook's younger days, when its user growth and revenues were boosted by game publishers like Zynga Inc, which made popular games like FarmVille for the Facebook platform.

In the South Korean market, for instance, eight of the top 10 highest grossing Android apps are games built on top of KakaoTalk. Tencent announced in November that it would introduce a mobile wallet feature enabling payment for goods with WeChat. And Tencent also makes money in China by using the app's location data to displaying nearby merchants' deals to potential customers.

If the messaging apps reach a certain scale, they could form 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 address book are very different from your Facebook friends and your LinkedIn contacts, and that's a natural place for a very powerful graph to be created,'' said Jim Goetz, a partner at Sequoia Capital.

Ted Livingston, the 25-year old chief executive of Kik, said he developed the capability for his service to support external features in November, and he plans to open the platform to outside developers in the near future.

Livingston said Kik and Whatsapp were "in a race to see who's the first to build 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 game publishers about hosting games, according to news reports in South Korea.

Goetz declined to address the reports, saying only that because it relied on a subscription business model, Whatsapp did not need to sell games or ads to make money.

Still, he said, the Whatsapp team "spends a lot of timE thinking about the developer community.''

Deal potential

Established social networking giants could also 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 group messaging applications in 2011.

Facebook acquired group messaging app Beluga in March of that year, enlisting its founders to help build its own stand alone app, Messenger, which launched six months later.

In late 2010, First Round Capital, an early stage venture capital firm, invested in a group messaging startup that was sold to Skype just fifteen months after it launched.

Kent Goldman, a First Round partner who has backed MessageMe, said it was unlikely that the market in the long term could support numerous independent messaging startups, which by their nature become more powerful as they grow larger.
       
"You don't want to be the smallest one when the music stops,'' he said.

You May Like

Video Experts Warn World Losing Ebola Fight

Doctors Without Borders says world is losing battle against Ebola, unless wealthy nations dispatch specialized biological disaster response teams More

Video Experts: Rise of Islamic State Significant Development in Jihadism

Many analysts contend the group - which grew out of al-Qaida in Iraq - has been rebuilding for years More

US-Based Hong Kongers Pledge Support for Pro-Democracy Activists

Democracy advocates call on Chinese living abroad to join them in opposing new election rules for their home territory More

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Larger Than Life Chinese Lanterns Make Southern California Appearancei
X
Elizabeth Lee
September 02, 2014 8:57 PM
Chinese lanterns with a long history are lighting up in 21st century style at the Los Angeles County Fair in southern California. Visitors can see traditional lanterns that hang, but also lanterns in the shape of animals, iconic landmarks and many other objects, all created by artisans from a place in China known for its lanterns. Elizabeth Lee has the details from the fair in the city of Pomona.
Video

Video Larger Than Life Chinese Lanterns Make Southern California Appearance

Chinese lanterns with a long history are lighting up in 21st century style at the Los Angeles County Fair in southern California. Visitors can see traditional lanterns that hang, but also lanterns in the shape of animals, iconic landmarks and many other objects, all created by artisans from a place in China known for its lanterns. Elizabeth Lee has the details from the fair in the city of Pomona.
Video

Video Experts See Rise of ISIS as Significant Development

The Islamic State’s rise seems sudden. It caught the U.S. by surprise this summer when it captured large portions of northern Iraq and spread its wings in neighboring Syria. But many analysts contend that the group - which grew out of al-Qaida in Iraq - has been rebuilding for years. VOA's Jela de Franceschi takes a closer look at the rise of ISIS and its implications for the Middle East and beyond.
Video

Video Israel Concerned Over Syrian Rebels in Golan

Israeli officials are following with concern the recent fighting between Syrian rebels and government forces near the contested Golan Heights. Forty-four U.N. peacekeepers from Fiji have been seized by Syrian Islamist rebels and the clashes occasionally have spilled into Israel. VOA’s Scott Bobb reports from Jerusalem.
Video

Video Ukraine Schools Resume Classes, Donate to Government Forces

A new school year has started in Ukraine but thousands of children in the war-torn east are unable to attend because of ongoing clashes with pro-Russia rebels. In Ukraine's capital, patriotic education has become the norm along with donations to support injured security forces fighting to take back rebel-held areas. VOA's Daniel Schearf reports from Kyiv.
Video

Video US Detainees Want Negotiators for Freedom in North Korea

The three U.S. detainees held in North Korea were permitted to speak with foreign media Monday. The government of Kim Jong Un restricted the topics of the questions, and the interviews in Pyongyang were limited to five minutes. Each of the men asked Washington to send a representative to Pyongyang to secure his release. VOA’s Carolyn Presutti has our story.
Video

Video Turkmen From Amerli Describe Survival of IS Siege

Over the past few weeks, hundreds of Shi'ite Turkmen have fled the town of Amerli seeking refuge in the northern city of Kirkuk. Despite recent military gains after U.S. airstrikes that were coordinated with Iraqi and Kurdish forces, the situation remains dire for Amerli’s residents. Sebastian Meyer went to Kirkuk for VOA to speak to those who managed to escape.
Video

Video West Africa Ebola Vaccine Trials Possible by Early 2015

A U.S. health agency is speeding up clinical trials of a possible vaccine against the deadly Ebola virus that so far has killed more than 1,500 people in West Africa. If successful, the next step would be a larger trial in countries where the outbreak is occurring. VOA's Carol Pearson has more.
Video

Video Survivors Commemorate 70th Anniversary of Nazi Liquidation of Jewish Ghetto

When the German Nazi army occupied the Polish city of Lodz in 1939, it marked the beginning of a long nightmare for the Jewish community that once made up one third of the population. Roughly 200,000 people were forced into the Lodz Ghetto. Less than 7,000 survived. As VOA’s Kane Farabaugh reports, some survivors gathered at the Union League Club in Chicago on the 70th anniversary of the liquidation of the Lodz Ghetto to remember those who suffered at the hands of the Nazi regime.

AppleAndroid