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Merging messaging services: will tech giants be stronger with all their eggs in one basket?

(Image credit: Image Credit: SendBird)

Nearly two years ago, the Economist asserted that data is now the world’s most valuable resource. Indeed, hackers have realised the value of data, with breaches happening almost weekly in 2018, resulting in hundreds of millions having personal information leaked online. Similarly, regulators have responded to data’s new-found importance by rolling out GDPR, an updated European data legislation, in late May last year.

Many companies have, or are seeking to, capitalise on the mountains of data that their companies produce and control. One of those organisations is Facebook, which is attempting to collate and reorganise its messaging data by merging WhatsApp, Instagram and Messenger services. Now that Facebook has chosen to do this, the pertinent question is why, and whether its competitors – such as Microsoft and Google – should be following suit?

Beyond opening the doors to billions of dollars in revenue, there are numerous business benefits for Facebook merging these services and pioneering change in the social media space. Some of these include:

Better advertising

Businesses will be able to target their advertising more effectively if they have access to the single database that Facebook will be able to provide. With the ability to send messages from Instagram to WhatsApp for instance, Facebook will have a much larger, pool of information that advertisers could gain access to through one platform.

By implementing this change, Facebook are hugely increasing the attraction for brands to advertise or gain access to data on their social media platforms, because they would be able to reach a significantly larger and more diverse number of consumers. This could be through user data surrounding liked products or how often users are engaging with brands, thereby increasing their value as a platform to advertise on.

Increased functionality and similarities to WeChat

Another major benefit of this move from Facebook is the increased functionality it will be able to offer users. Ease of use and increased functionality is how applications like WeChat in China have dominated the market. With WeChat, in a single platform, users can access services in retail, transportation, food, leisure, messaging and social media all without having to leave the application. While no other platform has been as successful in a single market globally, Facebook could have the user base to make it a possibility by absorbing a variety of services into its application – starting with messaging. If Facebook manages to successfully evolve in to such a platform and secure market dominance, the revenue benefits would be huge.

Google and Microsoft risk falling behind if they do not follow suit, particularly as the reward could push Facebook miles ahead in the market. However, in light of multiple data privacy scandals that have blighted Facebook over the last few years, many would not consider them capable of success in this field.

GDPR

GDPR sets out the legal guidelines for the collection and processing personal information of individuals within the EU, effectively giving consumers more control of their personal data.

Since Google became the first tech giant to succumb to a GDPR fine, the tech industry has been warned that they cannot operate in the same way as before. Tech giants will always be a priority for European watchdogs, with Facebook likely to be named at the top of that list. In early 2018, Facebook was informed that it could not merge the services until it found a way that complied with GDPR.

By attempting to merge messaging services, Facebook has made themselves a target for regulators who will be eager to add another exemplary privacy fine to their belt. Any concrete moves will cause the spotlight to be back on them, meaning Facebook need to do this right. It may be that Google and Microsoft will want to let Facebook test the water before doing the same.

Facebook currently has three separate messaging services, databases and groups of users. When merging the messaging services, consent of the users of all three platforms to have their data stored together will be needed. The waters become ever murkier when you consider that users have submitted different data to be part of the social network of their choice. WhatsApp, for instance, only requires a telephone number, meaning a user’s identity can be anonymous, but on Facebook you obliged to use your legal name under their ‘real name’ policy.

While having an identity across Facebook’s brands could have anti-fraud benefits, it also makes using the platforms difficult without having a central identity linking all three accounts. Since there are many people who have Instagram and/or WhatsApp who do not use Facebook, merging the three may be perceived as trying to increase Facebook’s user pool. This could push disillusioned users to other competitor platforms waiting in the wings.

Encryption issues

Currently, WhatsApp is Facebook’s only service which uses end-to-end encryption as standard, while Facebook itself has it as an option and Instagram does not offer it at all. The main issue seen in merging the services is to what level the messages will be encrypted, particularly when travelling between platforms. WhatsApp users will expect their messages to be encrypted at all stages, even when another platform is involved, which will be harder to achieve than it sounds.

The safest way for Facebook to do this would be to rebuild the messaging services of all three Apps from scratch, thereby ensuring that they would have identical protocols. This is because safety that is patched on top of software will never be as robust as when built from the ground-up.

Should Google and Microsoft do it too?

Indeed, there are many business benefits to merging the three messaging services for Facebook but it must be done right from the start. Facebook will be walking a tightrope, balancing getting the required consent from its users with avoiding hungry competitors and sanctions from regulators. Google and Microsoft will be content with letting Facebook be the guinea pig in this venture because, while they may fall behind initially, with the stakes so high they are taking on much less of a risk.

Kevin Curran, senior member, IEEE
Image Credit: SendBird