Messenger, instagram and Groups :

Facebook's three new products draws global focus

In the first earnings call since Evan Spiegel rejected Facebook CEO Mark Zuckerberg's USD three billion offer to buy snapshot, the Facebook chief sent a very clear signal to competitors. "Our vision is to create a set of products that let our users share with any audience they want," said Zuck. "Not everyone wants to share with all of their friends at once.

A lot of the new growth we see is from giving people power to share with different, separate groups of people."

Three products, in particular, help Facebook fight off Snapchat: Messenger, Instagram, and Groups.

Zuckerberg announced that Facebook Messenger, which was revamped in November to be much faster, has grown by 70 percent in the past three months.

Meanwhile, Facebook Groups have grown to 500 million users, with Zuck calling them a "core product."

And then there's Instagram, Facebook's golden ticket. The photo-sharing service introduced Instagram Direct in December to give photo-sharers control of the audience for any picture they'd like.

All of this, obviously, is a push against the market and mindshare controlled by Snapchat, which is growing at a rapid clip.

Users send more than 400 million snaps per day on the service, which has raised more than $123 million in funding since launching in 2011.

The app lets users share disappearing photos with individual friends or multiple users.

Not only does the content disappear (freeing them from any concern that Mom will see what was said on the internet), but it gives users total control over who sees what they share, on a case-by-case basis.

Instagram Direct tried to mimic this behaviour, though it seemingly hasn't gotten the same traction. And even if growth isn't a threat (yet), Snapchat's stubborn CEO certainly is.

He's the first young, driven wunderkind since Zuckerberg himself. Almost 24 and fresh out of Stanford, Spiegel even has his own frat-boy drama lawsuit on his hands, with a scorned founder suing Snapchat for a third of the business. If Zuck's throne has a usurper, it could very well be Evan. Snapchat is one of very few (successful) social apps that isn't reliant on Facebook in any way. Snapchatters find their friends through the Contacts app in the phone. There is no Facebook Connect.

No sharing to Facebook

Inside Snapchat, there is no Facebook. The shift has been a relatively slow one, but over the course of the past few years, Facebook has lost its swagger with teens and younger demographics. Even Obama knows it.

No one going through puberty wants to share the internet with their parents. Snapchat, entirely independent of Facebook, has given teens a playground.

And Facebook has failed, thus far, to seal that leak. By the time Snapchat caught Facebook's attention, it was too late. The December 2012 launch of Facebook Poke (a shameless Snapchat clone) was a total flop. And once Facebook was vulnerable, reportedly offering $3 billion for the service, Spiegel said no. Zuck has now responded, albeit somewhat subtly.

The stats around Messenger alone show that Facebook is ready to fight for the kids, whether the social network needs them or not. After all, 1.2 billion monthly active users certainly isn't worrisome. Snapchat is still, very much, a David to Facebook's Goliath.

Going forward, Zuck plans on separating Messenger and Groups even more from the central Facebook app. "If you think about the overall space of sharing in communication, there isn't just one thing that people are doing," said Zuck. "People want to share any type of content with any audience they want.

Facebook has always had a mission of helping people share with any audience, and historically that has always been through a single app." "Messenger used to feel like a feature of Facebook, but we're making it more of a standalone app," he added. "We've even taken it out of the main app, giving it room to breathe as its own experience. We're now focused on making that really good and adding to it."

In other words, "here's Facebook minus your parents."What say you, Snapchat? It's your move. Facebook is placing a $19 billion bet on reaching its next billion mobile users with the February acquisition of WhatsApp, a popular messaging service that lets people send texts, photos and videos on their smartphones.

The $19 billion deal is by far Facebook's largest and bigger than any that Google, Microsoft or Apple have ever done. But it is likely to raise worries that Facebook and other technology companies are starting to become overzealous in their pursuit of promising new products and services, said Anthony Michael Sabino, a St. John's University business professor.

"This could be seen as a microcosm of a bubble," Sabino said. "I expect there to be a lot of skepticism about this deal. People are going to look at this and say, 'Uh-oh, did they pay way too much for this?"

Facebook, for its part, is taking the long view. WhatsApp has 450 million monthly users, 70 percent of whom use it every day. The service is adding a million new users a day. There are 19 billion messages sent and 34 billion received via WhatsApp each day, in addition to 600 million photos and 100 million video messages.

At this rate, Facebook CEO Mark Zuckerberg is confident the app will reach a billion users. Services that reach that milestone, Zuckerberg said in a statement, "are all incredibly valuable."

It's an elite group to be sure - one that includes Google (which owns YouTube), Facebook itself and little else.

Three months ago, Facebook said that it's paying $12 billion in stock and $4 billion in cash for WhatsApp. In addition, the app's founders and employees - 55 in all, will be granted restricted stock worth $3 billion that will vest over four years after the deal closes.

The transaction translates to roughly 11 percent of Facebook's market value. In comparison, Google's biggest deal was its $12.5 billion purchase of Motorola Mobility, while Microsoft's largest was Skype at $8.5 billion. Apple, meanwhile, has never done a deal above $1 billion.

Facebook's $1 billion Instagram deal seems like a bargain in retrospect. Capturing mobile users - and young people - was a big reason behind Facebook's 2012 purchase of the photo-sharing app. Even its reported $3 billion offer for disappearing-message app Snapchat pales in comparison. Snapchat spurned the bid. The deal stunned Gartner analyst Brian Blau. "I am not surprised they went after WhatsApp, but the amount is staggering," he said.

The world's biggest social networking company likely prizes WhatsApp for its audience of teenagers and young adults who are increasingly using the service to engage in online conversations outside of Facebook, which has evolved into a more mainstream hangout inhabited by their parents, grandparents and even their bosses at work.

Zuckerberg said the service "doesn't get as much attention in the U.S. as it deserves because its community started off growing in Europe, India and Latin America. But WhatsApp is a very important and valuable worldwide communication network. In fact, WhatsApp is the only widely used app we've ever seen that has more engagement and a higher percent of people using it daily than Facebook itself."

Blau said Facebook's purchase is a bet on the future. "They know they have to expand their business lines. WhatsApp is in the business of collecting people's conversations, so Facebook is going to get some great data," he noted.