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Zuck: Facebook unbundling apps, wants "a pipeline of experiences"

  • "Facebook (FB) is not one thing. On desktop where we grew up, the mode that made the most sense was to have a website ... In mobile there’s a big premium on creating single-purpose first-class experiences," says Mark Zuckerberg in an NYT interview, highlighting his company's focus on unbundling its various services on mobile, where screen real estate is limited and each app represents just one home screen icon.
  • The remarks follow a TechCrunch report stating Facebook plans to remove messaging from its core app, thereby requiring users who want the feature to download the standalone Messenger app (and potentially triggering a backlash).
  • Zuck adds Facebook want to "build a pipeline of experiences" for users, and that his company's Creative Labs unit is "[exploring] things that aren’t all tied to Facebook identity." Those remarks arguably speak to the popularity (particularly among certain demographics) of rival platforms that don't require real names.
  • He also suggests he's unfazed by the muted early reception for Graph Search, arguing it's a 5-year project more focused on mobile than PCs (where it launched).
  • Interviewer Farhad Manjoo, discussing Zuck's strategy: "When was the last time you swooned over some new feature in Facebook? ... The more users you have, the harder it is to innovate, because most will be averse to any change ... By filtering its innovations into new apps that lack an established user base, engineers and designers can take creative leaps that may not have worked if they’d simply been adding features to Facebook’s primary app."
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Comments (28)
  • mlauritz
    , contributor
    Comments (354) | Send Message
     
    Zuckerberg is single-handily trying to accelerate the imminent FB Bubble-Pop.

     

    Change/Remove more & more of what made the original Facebook Popular...? - Great Idea Mark!
    16 Apr, 07:15 PM Reply Like
  • John Grandits
    , contributor
    Comments (368) | Send Message
     
    I'd rather see FB continually trying to innovate, be proactive about user engagement/experience, than rest on their laurels, feeling their product is complete with little threat from rivals. The move towards mobile is in the early innings and they're smart for focusing on that part of the business.
    16 Apr, 07:23 PM Reply Like
  • mlauritz
    , contributor
    Comments (354) | Send Message
     
    FB is losing REAL Daily Average Users & Monthly Average Users constantly; despite what they report or walk-around during Earnings Calls.

     

    I agree with you in that this is an attempt at "Innovation"; unfortunately I see this as just another incidental "Alienation" of few loyal users Facebook retains today.

     

    FB is in the business of monopolizing Peoples' Free Time & Social Hour - there are Plenty of significant Threats to Facebook's product model.
    16 Apr, 07:52 PM Reply Like
  • William Ford
    , contributor
    Comments (90) | Send Message
     
    It's called diversification or product augmentation within the same genesis. i.e. FB's origin.
    I am not a fan. but he has something more about him than meets the eye.
    I only wish that interviews of CEOs would reveal info to the shareholder and not those parasite analysts. i.e financial progress.
    Institutions, hedge fund etc all have the people's money!
    16 Apr, 09:16 PM Reply Like
  • William Ford
    , contributor
    Comments (90) | Send Message
     
    when you have 100s of million people involved in your company, to lose or should I say not get repeat business is normal.
    The insight you offer is redundant!
    Do you have something new to contribute?
    16 Apr, 09:26 PM Reply Like
  • mlauritz
    , contributor
    Comments (354) | Send Message
     
    So I take it you are both Blindly Long FB....

     

    Enjoy the ride!

     

    I'm sure they'll figure out how to profitably monetize the few real users they have left soon... Or not; considering FB is valued over $150 per Active User.

     

    If you throw out the numerous fake "users", this metric of FB Market Cap per User is even more frightening
    16 Apr, 09:44 PM Reply Like
  • tarheelboy
    , contributor
    Comments (193) | Send Message
     
    He's a genius and he will win. You saw googles results with mobile ads today; FB will knock it out of the park. You haters only require one word: jealousy.
    16 Apr, 07:30 PM Reply Like
  • William Ford
    , contributor
    Comments (90) | Send Message
     
    hope your right and hope they eviscerate those that have been sitting on the stock!
    18 Apr, 09:38 AM Reply Like
  • Scott Ryan
    , contributor
    Comments (272) | Send Message
     
    Google is stalking Facebook, trying to emulate FACEBOOK now (as seen on Titan acquisition). Behavior is what they call in poker a "TELL".

     

    GOOG is continuing to see their ad revenue shrink and FACEBOOK'S growing in comensurate fashion. FB is what GOOG was in the first decade of the new millinium and AAPL for that matter without Jobs.
    16 Apr, 07:34 PM Reply Like
  • Justin Hohn
    , contributor
    Comments (632) | Send Message
     
    Scott, I think you're aware that in spite of GOOG's miss yesterday, they are not "shrinking" but "slowing." Sorta like a "spending cut" in Washington ;)

     

    I'd agree with you that the market often doesn't distinguish between them, but it is an important distinction that--when ignored- causes lots of people to make straw-man arguments against the FB bears when we says that FB is slowing and they construe that as a claim that FB is is imminently bankrupt.

     

    I really don't see FB as a threat anytime soon to GOOG. Granted, I'm just one data point, but I cancelled my FB acct without much pain. I couldn't go 8 hours without Googling something. GOOG has an e-wallet already established. GOOG has an excellent ecosystem of Mail, Docs, Drive, Plus, Picasa, Chrome, etc.

     

    All these things add up to moat for GOOG. GOOG has data about what's *economically* valuable to me-- what I'm researching for a purchase. They know what email newsletters I get, which sites I frequent most, and such.

     

    FB only has personal data about what is *socially* valuable to me. Wedding, babies, interesting conversation with friends, arguments with people posting stuff online, etc.

     

    Facebook knows what I "like" but not what I value. Facebook attempts to construct a valuation model through sophisticated algorithms that are ultimately bases on a series of binary questions: did you "like" this? Did you "share" that? Did you "comment" on that? It takes these kinds of questions and assembles them into behavioral models.

     

    How does FB know *how much more* I "like" something than another? By how often I like or share their content? What if that's just because the content is funny, not because I really like the brand? I think the new Corvette is great, but I'm not going to repost everything I see with it on FB.

     

    GOOG knows if I've clicked on a Corvette ad, which site I was viewing when I clicked that ad, how much time I spent researching the Corvette and which pages I went to before and after.

     

    In short, FB is trying to build ad targeting off smaller number of data points that are binary. GOOG has more data points, and they are closer to continuous variables than binary.

     

    Any geek knows that a continuous variable encodes much more info than a binary one, which is why attempts to capture all that info with binary equivalents can get you close, but it's hard.

     

    Think about D-to-A conversion. If I record an audio sample with analog equipment, that data is continuous. I can go back with convert that to digital, but there is ALWAYS some information lost. Even with 24-bit 96kHZ sampling, there is some information you cannot capture. What if you had to capture that info with a 1-bit sample at 30hz?

     

    When it comes to modeling economic behavior (which is what is economically valuable), GOOG has both a much higher "bit rate" and "sampling frequency" than FB. Sorry if that analogy doesn't work for you, but if you're not familiar with D/A conversion, you can Google it.

     

    Of course, you can't really Facebook it, now can you?
    17 Apr, 10:00 AM Reply Like
  • futuretrade
    , contributor
    Comments (685) | Send Message
     
    "Google is stalking Facebook, trying to emulate FACEBOOK now (as seen on Titan acquisition). Behavior is what they call in poker a "TELL," Finally! Someone that see's the truth, Great call!
    17 Apr, 03:27 PM Reply Like
  • Guy in Ithaca
    , contributor
    Comments (408) | Send Message
     
    Here's what I think this "unbundling" of apps and "pipeline of experiences" is actually about. Although the "pipeline" may be a "pipe dream", here goes:

     

    Yahoo! Finance is Yahoo!, Tumblr is also Yahoo! but the branding is different. In a similar way Prius is Toyota although it is usually perceived first as Prius just as we think "Corvette" before the association with Chevrolet.

     

    It's really an advertising and promotion distinction. Cereals are another example. People think "Cheerios" not the corporation behind it. That's precisely how big corporations have moved into the organics section with friendly new names.

     

    Now to bring this back to the point. A certain amount of negativity has attached itself to the Facebook "brand." Mark is clearly aware of this. So are Google, Yahoo, Apple, Samsung, etc. ( they watch each other closely). So Mark and crew are trying to rebrand themselves away from the core Facebook product to some extent. That's my guess. It's a difference without a distinction but so is most of advertising and branding.

     

    Now whether FB can pull off this repositioning and rebranding of their product is anyone's guess. But this is why they are spinning it as a "pipeline of experiences" not tied to the Facebook experience. I don't know if they will succeed.
    17 Apr, 08:59 AM Reply Like
  • monfrere
    , contributor
    Comments (581) | Send Message
     
    Actually, it's not so much a choice as the fact that people live on their phone, not in FB on their phone. If they want to message they open a messaging app, not open FB to open FB messaging app. If they want to look at pictures, they open the picture app, not open FB to open FB picture app. FB is going with the flow because they HAVE TO, certainly not because they want to. It's simply what the market demands.
    17 Apr, 09:05 AM Reply Like
  • William Ford
    , contributor
    Comments (90) | Send Message
     
    some truth to what you say.
    there are numerous markets in the world, before FB bought "WhatsAp" CNBC or any American media did't know it existed. ignorance is bliss and it can cost you money.
    18 Apr, 09:33 AM Reply Like
  • Lester Hayes
    , contributor
    Comments (91) | Send Message
     
    Wrong again Monfrere. FB and Instagram account for over 20% of time Americans spend on smartphones. Can you think of any app, television channel, radio, or any other form of entertainment that commands over 20% of a consumers time? Anytime you see someone looking at their smartphone there's a 20% chance they're using FB or Instagram.
    18 Apr, 04:26 PM Reply Like
  • Guy in Ithaca
    , contributor
    Comments (408) | Send Message
     
    monfrere- Good point. But perhaps it's a bit of both. I've read more than one article recently which actually describe Facebook as "creepy." One article using that word was in the New York Times (not my favorite newspaper). FB does have a problem.
    17 Apr, 09:37 AM Reply Like
  • analysis well
    , contributor
    Comments (19) | Send Message
     
    If your against Facebook it's because you don't use it . Your like trying to talk about something you have not used enough to understand it. You have not walked in the shoes therefore you cannot understand . You don't even understand the generation that's using it. I pity you , it's like sitting on the sidelines when you could be playing ! You are missing out , weather anyone wants to admit it or not Facebook is like the old show happy days where everybody meets ! It will be as huge as google , you must quit comparing them , one is a search engine which is awesome like the library , the other is a place we go to meet and discuss what we've learned . Both needed and both appreciated ! Thank you
    It will be a hundred dollar stock by summer ! it's hard to stop a train and I am riding this one all the way !
    17 Apr, 08:53 PM Reply Like
  • Justin Hohn
    , contributor
    Comments (632) | Send Message
     
    AW--

     

    I have been on FB for over 4 years, and only recently cancelled my account. I think I know it fairly well, actually.

     

    I do understand the generation that's using it, more importantly, I understand the generation that is NOW using it is VERY different than the generation that built it. Facebook is already passé among most of the younger generation, and there's just so many other choices that FB has no unique niche to fill for them.

     

    AW, I *beg* you, please at lest put some trailing stops on your train ride so that you get to KEEP the $100 share price this summer.
    19 Apr, 11:02 PM Reply Like
  • Lester Hayes
    , contributor
    Comments (91) | Send Message
     
    Justin,

     

    What other choices do you have to connect with your friends? Is it really a niche if 20% of time on smartphones is with FB?
    20 Apr, 01:57 AM Reply Like
  • Justin Hohn
    , contributor
    Comments (632) | Send Message
     
    Let's see--

     

    There's native messaging. iMessages are good. And photo stream, too. There's more apps than you can shake a stick at (snapchat, Whisper, etc). There's even Google Plus (remember that? It's still around).

     

    There's email.
    Written letter
    Recorded audio
    Passenger Pigeon
    Skywriting

     

    I'm sure I missed a bunch, too.
    20 Apr, 01:40 PM Reply Like
  • Lester Hayes
    , contributor
    Comments (91) | Send Message
     
    As they say "garbage in - garbage out". We're talking about social media, and how that is changing the dollar spend with advertisers. As sad as this may sound, when you see someone looking at their smartphone there's a 20% chance they're on FB.

     

    I think you would be better served to put aside your personal opinion of FB, and your subjective analysis of social media. I would suggest picking up some data from companies like Comscore, Nielsen, Adobe Digital Index, etc. Your financial advice can easily be verified, but your social media advice is way off the mark.

     

    21 Apr, 06:34 PM Reply Like
  • mlauritz
    , contributor
    Comments (354) | Send Message
     
    @ Lester Hayes

     

    I've got a website for that I "suggest picking up some data from"; it's called the SEC EDGAR tool.

     

    Once in EDGAR you can search all of Facebook's past Financial Filings & then notice that FB only brought in ~$8 Billion in Revenue Last Fiscal Year.

     

    FB may very well grow it's Revenue and Earnings for a few more years; But In my opinion; the website and its active following (MAUs) are both in Decline & I have a strong feeling that FB the equity will never live up to its $150+ Billion Market Cap...

     

    I see FB under $15/share within 3 years... We will see who's right ;-D
    21 Apr, 08:39 PM Reply Like
  • Justin Hohn
    , contributor
    Comments (632) | Send Message
     
    If only I could sell Jan 2018 calls!!!!
    21 Apr, 09:38 PM Reply Like
  • Lester Hayes
    , contributor
    Comments (91) | Send Message
     
    I don't see the point of your analysis. There aren't any "value investors" looking at FB, it's a speculative stock as is the case with all stocks. Justin had the best analysis of FB, when he said the stock could be at $20 or $100 in a year.

     

    You could have taken the same stance a year ago and argued that 65b market cap is ridiculous for a social website that hasn't figured out how to monetize mobile. Our good friend Andy P took that position and lost out on 150% upside.

     

    My analysis is based on what is trending now, and the data i suggested is based on what is trending now. What is trending now is advertisers are flocking to FB, and there's no arguing that fact, which is why i suggested looking at the data.

     

    Why argue about what will happen in 3 years? Right now the Fed is printing money, and FB is taking over the advertising industry. Buy the ticket, take the ride, and eventually when it gets to 200b market cap, get the hell out.
    22 Apr, 01:05 PM Reply Like
  • Taiko
    , contributor
    Comments (11) | Send Message
     
    It would like to ask for why $FB is downtrending by this articles was released. Why?.
    19 Apr, 04:36 PM Reply Like
  • Justin Hohn
    , contributor
    Comments (632) | Send Message
     
    Taiko, I can only speculate, really. I suspect the market didn't react favorably to Zuck's statement that he wants to dismantle the FB machine into separate apps (messenging, wallet, etc).
    19 Apr, 10:58 PM Reply Like
  • mayalar2012
    , contributor
    Comments (34) | Send Message
     
    I am a real "greenhorn", but I have noticed in the few equities which I have been following that those that beat their earnings prediction showed quite a dip prior to earnings announcement (i.e,. MU, SNDK) while those that did not beat their earnings prediction (i.e., T, SYMC, AMD, GOOGL) had quite a remarkable upswing prior to earnings report. Is there a method to this "madness"?
    20 Apr, 10:04 AM Reply Like
  • Justin Hohn
    , contributor
    Comments (632) | Send Message
     
    Mayalar, I wouldn't read too much into that as an actual pattern with meaningful implications.

     

    Markets are very volatile right now, and prices move a lot before earnings.
    20 Apr, 01:38 PM Reply Like
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