Facebook – Dial M.

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Facebook is making the right moves to become an ecosystem.

  • Facebook’s intentions to become a fully-fledged ecosystem have come into sharper relief with the launch of its own personal digital assistant, Facebook M.
  • Facebook M will appear inside Messenger as a contact that is permanently on line and is there to fulfil requests and answer queries.
  • The main difference between Facebook M and Google Now, Siri and Cortana is that it is part artificial intelligence and part human.
  • This makes Facebook M a cross between the established digital assistants and concierge services like Taskrabbit which use humans to fulfil the requests.
  • The problem with humans is that while they can ensure that any request is fulfilled, it is an expensive service to provide.
  • Facebook’s aim is to move as much of this as possible into artificial intelligence but even with humans on board I think that it is facing an uphill battle for three reasons:
    • First: Machine learning. Facebook is a personal data and communication company and while it does employ a degree of machine learning it is not in Google’s class.
    • Consequently, it is unlikely to be able to provide better responses to queries and know what it is that the user is really after than Google Now.
    • I suspect that both Apple and Cortana will show better machine learning sitting behind them than Facebook M.
    • Second: integration. Facebook relies on the platforms of others to deliver its service and experience to users.
    • This means that it will not have the same kind of access to other apps and services that will be required to make the service best in class.
    • For example, because Microsoft and Google own many more Digital Life services, they can ensure that their assistants have better access to those services than competitors.
    • Hence, it is quite possible that without its own services (outside of social networking) that Facebook will struggle to keep up with others.
    • Third: Ease of access. Facebook M will, for now, only exist inside the messenger client.
    • This means that the user will have to unlock the device, click on Messenger, click the M user and then put in his query or request.
    • Siri, Cortana and Google Now can all be accessed simply by talking to a locked device on standby.
    • This access is again possible because the companies behind these services all have complete or significant control of the platforms upon which the service is offered.
    • Ease of access has long been known to be a key factor in how much an app or service gets used.
  • The net result is that in this current form, Facebook M still needs a lot of work, greater automation and integration into the ecosystem if it is to really take on the other three.
  • However, this is yet another sign that Facebook has grasped how important it is for its long term outlook to have a wider range of Digital Life services beyond just social networking.
  • Facebook M joins gaming (see here) as new services that break Facebook out from just being an app and usher it into the world of the ecosystem.
  • This move further distances Facebook from Twitter which is still wondering it needs to do to break free of the stagnation that now besets it.
  • I would choose Facebook over Twitter without hesitation and am even warming up to Facebook despite its lofty valuation.

RICHARD WINDSOR

Richard is founder, owner of research company, Radio Free Mobile. He has 16 years of experience working in sell side equity research. During his 11 year tenure at Nomura Securities, he focused on the equity coverage of the Global Technology sector.