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Isn't this currency play just a way for Facebook to get more data? Data about social interactions and how they influence purchase decisions would be very market

Isn't this currency play just a way for Facebook to get more data? Data about social interactions and how they influence purchase decisions would be very marketable, especially to e-commerce businesses that want to take on Amazon. It's also a potential moat for FB to protect its ad business against encroachment by Amazon's own ad business.

carlosdp 7y ago
No, it's about increasing revenue per user for their fastest growing market (emerging market) by giving access to the 500m+ unbanked people that have internet/cells/FB/WhatsApp in these markets a way to access the digital economy, so they can actually buy things people advertise on Facebook, driving up the price for those ads. They can make a killing on this without needing to touch anyone's data.
- epiphanitus 7y ago
  Why not both? Besides, the lions share of FB's current revenue still comes from US Ad spending. Amazon's dominance of e-commerce threatens this because people who want to buy something increasingly just go to Amazon.com. Amazon's ads offer the opportunity to influence consumers at the end of the conversion funnel. But this means that Amazon will get a bigger slice of both the ad spend and the purchase data which FB doesn't yet have. Their ad business already makes almost $3B a quarter - that's almost 1/5th of FB's revenue. This is money that likely would otherwise have gone to FB/Google, but isn't anymore. This is big threat to FB's core business in what is their most lucrative market right now. Would they leverage this data to try to keep their ad business competitive? I certainly think so. Just imagine how much stuff an AI that knows your purchases and your social life can get you to buy.
  - carlosdp 7y ago
    > Besides, the lions share of FB's current revenue still comes from US Ad spending But the largest opportunity for growth is in the emerging world.
stock_toaster 7y ago
Maybe some of it is also a play to attempt to head off WeChat/Tencent in China and other developing countries? (WeChat is very popular for p2p payments, as well as social networking)
- epiphanitus 7y ago
  FB is banned in China but outside of China I definitely could imagine a fierce competition between FB and a Chinese tech conglomerate over payments. I think the challenge for FB will be govts. China is investing huge money in developing countries around the world, and they may pressure the host countries to make life harder for FB so their companies have an advantage.

carlosdp 7y ago

No, it's about increasing revenue per user for their fastest growing market (emerging market) by giving access to the 500m+ unbanked people that have internet/cells/FB/WhatsApp in these markets a way to access the digital economy, so they can actually buy things people advertise on Facebook, driving up the price for those ads. They can make a killing on this without needing to touch anyone's data.

epiphanitus 7y ago
Why not both? Besides, the lions share of FB's current revenue still comes from US Ad spending. Amazon's dominance of e-commerce threatens this because people who want to buy something increasingly just go to Amazon.com. Amazon's ads offer the opportunity to influence consumers at the end of the conversion funnel. But this means that Amazon will get a bigger slice of both the ad spend and the purchase data which FB doesn't yet have. Their ad business already makes almost $3B a quarter - that's almost 1/5th of FB's revenue. This is money that likely would otherwise have gone to FB/Google, but isn't anymore. This is big threat to FB's core business in what is their most lucrative market right now. Would they leverage this data to try to keep their ad business competitive? I certainly think so. Just imagine how much stuff an AI that knows your purchases and your social life can get you to buy.
- carlosdp 7y ago
  > Besides, the lions share of FB's current revenue still comes from US Ad spending But the largest opportunity for growth is in the emerging world.

stock_toaster 7y ago

Maybe some of it is also a play to attempt to head off WeChat/Tencent in China and other developing countries? (WeChat is very popular for p2p payments, as well as social networking)

epiphanitus 7y ago
FB is banned in China but outside of China I definitely could imagine a fierce competition between FB and a Chinese tech conglomerate over payments. I think the challenge for FB will be govts. China is investing huge money in developing countries around the world, and they may pressure the host countries to make life harder for FB so their companies have an advantage.