Why Facebook killed a trio of previously promising applications – The Motley Fool



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The Instagram acquisition for $ 1 billion in 2012 by Facebook (NASDAQ: FB) has proven to be one of the wisest investments in the world. 39; company. At the time, many critics were wondering why Facebook would pay so much for an application to create and share filtered photos. But between January 2013 and June, monthly active users of Instagram (MAU) rose from 90 million to 1 billion.

  Facebook CEO Mark Zuckerberg

Image Source: Facebook

popularity among younger users, and it has become a valuable secondary advertising platform. Bloomberg Intelligence recently estimated that the application was now worth $ 100 billion, which represents a hundredfold return on Facebook's initial investment.

Facebook, in its desire to find the next Instagram, has acquired and developed many applications in recent years. The only real success was WhatsApp, which she had acquired for nearly $ 22 billion in 2014. Still, there were a lot of losers – including Snapchat clone Lifestage, her rival Groupon Deals, and his virtual assistant Mr. [19659005] Facebook has recently launched three other promising applications in this digital dumpster: its Android Hello dialer, its fitness application Moves, and its anonymous teen app Tbh. Let's examine what each of these failures mean for the future of Facebook

Goodbye, Hello

Facebook introduced Hello in 2015. The application has replaced the default dialer on Android phones with a new application Caller ID that blocked unwanted calls and helped users search for people and businesses by pulling data from Facebook's social network.

Hello posted additional data on Facebook about the callers, even if a contact has not been registered on the phone of a user. It also allows users to block specific numbers by sending their calls directly to voicemail, and promotes the use of free calls via Wi-Fi connections.

Hello was clearly an attempt by Facebook to get stuck in Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) Google Android Mobile Ecosystem. In theory, Hello could hijack Google Maps business search and disrupt the seamless connection between Maps and the Android dialer. In fact, most users did not think that it was necessary to install a dialer powered by Facebook.

Facebook's previous attempt to disrupt Android, Facebook Home, flopped for similar reasons. With Home, Facebook replaced the default Android launcher with its own built-in skin with Facebook features, but it was considered a heavy and useless application. Facebook abandoned Home less than a year after its launch in 2013.

All about Moves

Facebook acquired the Fitness Moves app in 2014. It appeared to be a smart purchase at the moment. era, since the explosion of demand for Fitbit (NYSE: FIT) had triggered a seizure of land on the market wearables. Move to track a user's location, record different movements (such as walking, running, and cycling) between locations, and note the number of steps taken. The application had scored about 40 million downloads at the time of Facebook's redemption.

  A woman checks her fitness tracker

Image Source: Getty Images.

But two months after Facebook bought Moves, Google unveiled Google Fit – – a more comprehensive fitness app built into Maps and third-party apps. Fitbit has also subsequently added more advanced features to its basic application that allows users to track different types of workouts, record their calorie and food counts, and participate in social challenges. . Apple followed suit with its Health application later in the year

Meanwhile, demand for fitness trackers began to peak . Fitbit's business turnover jumped 149% in 2015, but slowed to 17% in 2016, then dropped by 26% in 2017. Even market leaders like Fitbit were struggling to grow it seemed pointless to continue supporting a saturated fitness app. fragmented market.

Tbh, it's hard to keep teenagers engaged

Facebook acquired Tbh last October, a little over two months after the startup's creation. Tbh was an anonymous survey app designed for teens. Users can question with multiple choice questions like "Which person has the most integrity?" or "Which person has the best smile?" Tbh demanded that the questions be "uplifting" and "do not hurt any group".

Whenever a user is chosen, he or she earns anonymous gems (a pink gem of a girl and a blue gem of a boy), which can be used for features additional. Tbh has been downloaded five million times during its first nine weeks and has accumulated 2.5 million active users a day. Facebook, who probably saw Tbh as another way to compensate for its loss of teenage users, was eager to buy the app.

Unfortunately, Tbh's initial growth spurt did not turn it into an upcoming Snapchat. Facebook has not disclosed any other user numbers for Tbh, but its polls have probably failed to involve teens like Snapchat's ephemera messages or filtered photos and videos of 39; Instagram.

Key Points to Remember

The failures of Hello, Moves, and Tbh will not have a significant impact on Facebook's finances. However, they represent failed efforts to disrupt the industries dominated by Google, Fitbit, and Snap (NYSE: SNAP) and reveal its insecurities in the ever-changing mobile market.

Suzanne Frey, an executive at Alphabet, is a board member of The Motley Fool. Leo Sun owns shares of Apple. The Motley Fool owns shares and recommends Alphabet (A shares), Alphabet (C shares), Apple, Facebook and Fitbit. The Motley Fool has the following options: long January 2020 calls $ 150 on Apple and short-term January 2020 calls 155 on Apple. The Fool Motley has a disclosure policy.

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