This could be the beginning of the end for Facebook’s social network

This could be the beginning of the end for Facebook’s social network

That much was clear from a post CEO Mark Zuckerberg shared on Wednesday outlining the company’s newly stated direction. Intimate, encrypted, private messaging services like WhatsApp and Messenger are in. Facebook’s semi-public, not-very-private News Feed is out.

“I believe the future of communication will increasingly shift to private, encrypted services where people can be confident what they say to each other stays secure and their messages and content won’t stick around forever,” Zuckerberg wrote. “This is the future I hope we will help bring about.”

The post was significant for a number of reasons, perhaps most importantly because Facebook has built a $55 billion annual advertising business on products that aren’t really private, don’t have end-to-end encryption, and do stick around forever. (Or pretty darn close.)

This is, on the surface, a dramatic shift in Facebook’s thinking. And it leads to a number of questions.
Why is Facebook doing this?
Zuckerberg answers that question without explicitly answering that question. “In a few years,” he wrote, “I expect future versions of Messenger and WhatsApp to become the main ways people communicate on the Facebook network.” It’s as simple as that. Facebook doesn’t make product decisions without consulting user data. And if Zuckerberg says he expects that WhatsApp and Messenger are the future, it’s because that’s where Facebook sees that users are already spending their time.

Facebook foreshadowed this announcement last fall when it told investors that Stories, the ephemeral photo and video montages it copied from Snapchat, was blowing up in terms of popularity. “I just think that this is the future,” Zuckerberg said at the time. “People want to share in ways that don’t stick around permanently, and I want to be sure that we fully embrace this.”
Facebook can see what its users are doing — they’re sending private messages and sharing disappearing photos and videos — and it’s leaning into those trends.
What will happen to Facebook and Instagram?
Nothing yet. Zuckerberg didn’t say anything about abandoning Facebook or Instagram, and it sounds like Instagram will eventually get more privacy and encryption features that fit with Facebook’s new mission. The reality is that Zuckerberg couldn’t abandon those products even if he wanted to: The vast majority of Facebook’s revenue comes from those two apps, so they won’t be going anywhere.

What this does seem to signal, though, is something rather startling: This feels like the beginning of the end of Facebook’s core social network. No, Facebook isn’t going away anytime soon. Yes, Facebook may still be relevant a decade from now. And it’s likely the company will continue to invest in building Facebook features, like Marketplace and Facebook Watch.

But Facebook’s core social network is primarily a place to post photos and videos and comments that aren’t private and don’t disappear. That’s not the future Facebook is building toward — and apparently not the future that users actually want. What that actually means for your News Feed is unclear, though it’s not likely to change anytime soon.

Will this impact Facebook’s business?
This may be the most important question, and it’s one Zuckerberg didn’t address in his post. But Facebook’s entire business is built on a data-driven advertising model. Facebook puts ads into users’ feeds, and messaging apps don’t have those feeds. Those ads are also valuable to advertisers because Facebook can target people based on information that they keep on their profile. If everyone is using private messaging apps with high levels of encryption, it’s fair to wonder what data Facebook will use to target people with ads moving forward.

That doesn’t mean there is no business model for private messaging — WhatsApp and Messenger have Stories, for example, and Facebook can sell ads alongside those Stories. WhatsApp is also building out a business product, which will let brands and retailers communicate with users via messages. Given Facebook’s interest in cryptocurrencies, it seems that there may be an opportunity for the company to push deeper into commerce and payments as things become more and more private and secure.

But WhatsApp and Messenger are not big businesses for Facebook despite having more than 1 billion users apiece. Figuring out how to make money from messaging will be crucial to this process. It appears Facebook has time. The company’s stock barely moved on the news Wednesday, which means it’s clear investors aren’t concerned, at least in the short term.

Are there risks to having everything encrypted?
Yes, there are definite tradeoffs. Messages that are end-to-end encrypted are not accessible by Facebook, which is great news for privacy, but also make it easier for bad actors to use Facebook products to do harm. WhatsApp is already dealing with this in India, where so-called fake news as been a real problem, in some cases leading to real offline violence. In Brazil, a WhatsApp executive was arrested a few years ago because the government wanted access to some user messages, which Facebook claims it couldn’t provide. Zuckerberg said that in Facebook’s private, encrypted future, the company will not be able to catch posts on “child exploitation, terrorism, and extortion,” but that it still has “a responsibility to work with law enforcement and to help prevent these wherever we can.”

There are benefits to encryption, too. Most people would probably say they don’t want Facebook (or Apple or Google) accessing their private messages. And as Zuckerberg pointed out, this could also be important as messaging apps become a place for financial transactions.

Ultimately, though, Zuckerberg says the trade-offs are worth it. “We understand there are a lot of trade-offs to get right, and we’re committed to consulting with experts and discussing the best way forward,” he wrote.
s this why Facebook wants to merge all of its messaging apps?
It’s a big part of it, yes. If people are flocking toward private messaging, it behooves Facebook to integrate its services so that’s it’s easier to create one massive network. Zuckerberg said as much on Wednesday.

“Today if you want to message people on Facebook you have to use Messenger, on Instagram you have to use Direct, and on WhatsApp you have to use WhatsApp,” Zuckerberg wrote. “We want to give people a choice so they can reach their friends across these networks from whichever app they prefer.”

Eventually, Zuckerberg wants this to “extend” to text messages as well.

It’s also possible Facebook is doing this to avoid anti-trust problems. There has been a lot of talk in the past year that Facebook is too big, and may need to be broken up. That would be a lot harder to do if all its apps and services are linked.
How quickly will all this happen?
It’s going to take some time for Facebook to reorient its products to feel more private. Zuckerberg said this transition would happen “over the next few years.” It’s not at all uncommon for Facebook to announce things that never come to fruition, but this feels a little too big to just fall by the wayside.

One thing to keep in mind: Facebook can’t merge all of its individual messaging apps until, at a minimum, they’re all end-to-end encrypted. That can be a lengthy process; it took WhatsApp years to fully roll it out. It may not take that long this time around, and one source inside Facebook said the goal is to make some noticeable movements on this merging process during the second half of 2019. But this entire transition to more encryption and more privacy won’t be done anytime soon.