Facebook (NASDAQ: FB) It will close two of its apps this month, Lasso and Hobbi. Both apps borrowed from competitors on social media.
Lasso was a TikTok clone, providing tools for creating and sharing short videos. Hobbi looked a lot like Pinterest (NYSE: PINS), giving users a place to collect images and ideas related to their hobbies. Both applications were run by Facebook’s New Product Experimentation team, and although Lasso lasted a couple of years, Hobbi was less than six months old.
Facebook’s decision to close the two apps should not have a major effect on the company’s daily finances. But it also doesn’t mean that ByteDance, the parent company of TikTok, and Pinterest can breathe easy. The 800-pound social media gorilla will undoubtedly continue to work to co-opt his rivals’ best features and make them his own.
Facebook link closes on July 10. Image Source: Lasso Videos on Facebook.
I still can’t copy Snapchat
Facebook tried and failed to copy Snap‘s (NYSE: SNAP) Snapchat multiple times before finding something with Instagram Stories. There were Poke and Lifestage and Slingshot and Instagram Bolt, which copied at least one key feature from the smaller app.
But even since the launch of Stories and its expansion to hundreds of millions of users, Facebook is still looking to take the best features of Snapchat and provide them to its own users. He launched Threads in October last year, which focuses on quick visual communication with close friends.
Facebook really doesn’t expect these products to catch up. But when they do, you can quickly scale up and start monetizing them. Instagram Stories went from launch to 150 million users in less than six months when Facebook started showing ads to Stories viewers. Last year, Stories helped generate around $ 7 billion in ad sales.
Failure is only part of the game. Learning what doesn’t work can bring Facebook closer to something that does work. And when it does, it could mean billions of additional advertising revenue for investors in FAANG shares.
I’m still aiming for TikTok and Pinterest
While Facebook has shut down Lasso and Hobbi, there is still a lot of potential for the company to find success by copying competing features in other ways.
For one thing, Instagram Reels, another TikTok clone still operates under the Instagram umbrella. It launched in Brazil in November and expanded to France and Germany last month. The app seems to be gaining more traction than Lasso. Instagram is considering deeper integration with its core app, which could accelerate user growth.
Meanwhile, Facebook’s interest in facilitating commerce through its apps couldn’t be stronger. It launched stores in May and announced an expansion of Instagram Shopping later this month to make it available to almost all companies and creators on the platform.
Currently, buying on Instagram or Facebook lacks intention compared to the Pinterest platform, where users collect ideas. Pinterest is practically capable of creating a personalized catalog for each of its users when they are looking to buy something for their home, wardrobe or big event. Comparatively, Instagram is more like storefronts and Facebook is full of ads for impulsive purchases.
But Facebook is laying a solid foundation for a more Pinterest-like experience. And while it may be years from invading Pinterest’s biggest driver of revenue growth, it will continue to look for ways to win over Pinterest users right now. All of Facebook’s other work on social shopping indicates that no attempt has been made to copy its smaller rivals.
The next source of growth.
If Facebook finds success copying TikTok or Pinterest, it could create a new source of growth for the company. You are already facing advertising load saturation challenges on your food products, and the Stories can’t be far behind. Facebook will eventually need a new surface or source of engagement to keep revenue growing at the rate investors have seen in recent years.
Pinterest generated $ 1.1 billion in revenue last year, and TikTok is expected to generate $ 500 million in the United States this year. That’s not much compared to Facebook’s top $ 71 billion line in 2019.
But those numbers also believe in Facebook’s potential if it can copy the characteristics of any of the companies. Snap generated just $ 400 million in revenue in 2016, the year Facebook launched Stories. Now, stories are a major contributor to the company’s top line.
