Facebook (NASDAQ:FB) is launching a native store locator where users can search for stores around them. This is a significant step towards monetizing its mobile platforms (ie. app and messenger apps) beyond advertising and into the underpenetrated on-demand/mobile payment space. Given that FB is already testing payments in its messenger where users can book Uber, it comes as no surprise that FB is testing store locator so FB can strengthen its relationships with the offline merchants by providing a robust targeted location-based ad platform and drive payment revenue. I remain bullish on FB and continue to see the company being the hallmark of any long-term growth portfolio.
While local advertising is certainly an exciting area for FB to expand, I think the bigger implication could come from payment revenue in the long-run. I note that FB is already testing local markets, which is essentially an e-commerce platform powered by FB groups. The feature allows FB users to browse and post items to sell across a variety of product categories such as auto, appliances, furniture, apparel, household, books and so forth. Additionally, the section includes a "Buy" and a "Sell" interface and ways for users to search across the marketplace with specific key words. Although the feature is still in limited test markets, I believe that a broader rollout to local merchants is inevitable and this could allow FB to drive its own proprietary payment platform, making FB a competitive player in the fast growing mobile payment market.
Moving into payment is an inevitable move for FB given its network effect. The idea of FB helping merchants to advertise their products to the users so they can transact over mobile devices and pick up later in-store is a logical extension of FB's ecosystem. This would make FB even more competitive than Apple Pay (NASDAQ:AAPL) or Samsung Pay given that these competitors do not have a comparable user database and ad platform. With a robust payment system, FB could eventually make the transition toward internet finance similar to what BABA, Tencent and Baidu (NASDAQ:BIDU) are doing in China (see - Alibaba: Setting An Example In Mobile Payments).
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