What’s Next for Facebook?

Although Facebook’s stock has experienced a significant recovery this week, it is still has a long way to go before it gets back to its previous highs. Some are asking the question of whether Facebook has become the incumbent and if there will be a shift to other networks, but the big question is, what will Facebook do next?

A Shift in Strategy

Right now, CEO Mark Zuckerberg is trying to do everything he can to restore the faith and trust of users in the platform. In a lengthy (3,000 words) blog post last week, he detailed how he expected much of Facebook’s utility to move to the private messaging aspect. Messenger and Whatsapp will shine in this regard, and Zuckerberg would like to make it clear that the privacy of users is going to become a priority.

By moving towards more private and encrypted communications, Facebook’s whole utility to users will change significantly. Instead of public posts, users will concentrate down more into smaller groups. And instead of posts being permanent, there could be an expiry date on these communications.

Entering the Blockchain World

This is a start, but there are a few other big moves expected from Facebook in the near future. For example, Facebook recently acquired Chainspace, a blockchain-based startup that specializes in smart contracts for facilitating payments. This is a concrete move into the blockchain world, and since then, the NYT has uncovered rumors that Facebook will be unveiling their very own coin soon.

The Chainspace purchase represents a unique hiring method where Facebook can acquire a company and get access to all the intellectual human capital inside. Although Barclays analysts have projected Facebook to potentially earn $3 to $19 billion in extra revenue from Facebook Coin by 2021, this is just one route they could take.

Some Strategic Alternatives

There are a few other directions Facebook could go. For example, considering their history of making big acquisitions, are there any other companies which could be tempting for them to buy? Look at Snapchat, Buzzfeed, Twitter, and Pinterest – none of these companies seem to have long-term viability (we’ll talk more about Twitter another time). So could they be bought and bolted on to the current operations, which would allow for more synergies.

This is exactly what happened with Instagram, right? With the shift from text-based posts to photo-based posts, Instagram has gone up massively in value. In fact, there are even some ways to look at it where Instagram is more valuable than Facebook’s core platform. The decline of people posting publicly on Facebook, combined with the increase in desire to share photos and edit them, has created a world where many of the most valuable users are spending more time on Insta than Facebook.

Even though Facebook and Google still dominate the ad space, nothing is ever certain, and the strategies are constantly evolving. It is possible Facebook’s stock peaked in July 2017, and the insulated culture they’ve built will be the end of them. It is in denial about the societal need for free speech, and lack of trust many people have in Facebook’s ability to “manage” the news. The 2016 election was bad, but the post-election sentiment, coupled with recent scandals, has been worse.

Featured image courtesy of Shutterstock.