Is the Facebook Inc (NASDAQ:FB) Messenger App Headed For A Transformation?

August 01, 2017, 09:17 am ET, BY Simon M.- Contributor| Editor: Thomas H. Kee Jr. (Follow on LinkedIn)

Facebook Inc (NASDAQ:FB) CEO, Mark Zuckerberg, announced last week during an earnings call with investors that the company was looking for ways to monetize its messenger app. Many people on the call assumed that this was a long-term project as the company indicated that it was still far from monetizing the app.

However, on Monday, the company took a major step in the direction of monetizing its messenger app by announcing that it had acquired Ozlo. Ozlo is a small start-up that developed the Ozlo virtual assistant app, which works on Android, Windows and iOS devices.

It is not yet clear what Facebook will do with the new virtual assistant app given that the app was not popular with most Android users. The Google play store indicates that the app was downloaded a mere 500-1,000 times.

Facebook already allows numerous chat bots to interact with its users via the messenger app, but the Ozlo app is quite different from the other chat bots. However, it is highly likely that Facebook will integrate some of Ozlo’s features into its M assistant bot, which is currently being tested by a small group of users.

During its earnings announcement, Facebook revealed that mobile advertising revenues made up 87% of its total earnings. This highlights the importance of the company’s messenger app given its popularity among young smart phone users.

Facebook could witness a significant increase in revenues if it was able to monetize its messenger app by allowing advertisers to place ads on the app. Facebook is also keen on popularizing its messenger app given that it was spun-off from the main Facebook application to operate as a semi-independent app.

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