08.03.20 - Facebook’s TikTok competitor, Instagram Reels, is set to launch this week. After posting a strong earnings report this week following a historic congressional hearing with the four CEOs of big tech, Facebook isn’t slowing down one bit. Facebook is up to something big. There has been confirmation of a large creators’ fund, specifically designed to lure major influencers over to the new platform to quickly absorb TikTok’s social market share. Facebook has more than six times the market cap of TikTok’s parent company ByteDance and can afford to outspend the doors off of the company to lure creators to the new platform. Regardless of their purchasing power, the Federal Government is going to do most of Facebook’s dirty work for them as tensions continue to increase between the United States and China.
The company is taking the next step to push further into short-form video content. Snapchat and Vine were arguably the first movers in this wave with Musical.ly now TikTok to follow. Facebook stands to add another $250M to its annual revenue, with that number to compound over time.
Another potential scenario is the government of the United States forcing an outright sale of the entity. Microsoft has been in talks to acquire TikTok, and should the company do this, it may keep TikTok afloat for now but it might put it on life support against the threat of Facebook’s Instagram Reels, it’s proven track record in the space, and it’s massive creators' fund.
India has already banned TikTok with consideration of a ban in Japan and Europe to also follow. Another App, Triller, has already been filling the void TikTok has and will leave in global social media markets. What remains clear is Facebook has the market in their sights, they’ve managed to muscle their way into dynamic changes in social media trends successfully in the past by cloning popular competitor features and they’ll do it again.
Facebook knows the value of positioning and they refuse to fall into irrelevance and the dustbin of tech history — like Myspace and Bebo before. With their past experiences, it’s likely they will nail the user experience as they have before in delivering experiences that continue to make it easier for their users to connect and share with the world around them as GenZ takes to the internet. Read the full article from last Friday here.
Source: Brookfield Brief