Facebook Inc.'s New Feature Illustrates Zuckerberg's Next Growth Opportunity

How do social networks like Facebook and Twitter grow their businesses when user growth starts to slow? Here's one way.

Apr 3, 2014 at 10:00AM

How do social networks like Facebook (NASDAQ:FB) and Twitter (NYSE:TWTR) grow their businesses when user growth starts to slow? One way is by facilitating increased engagement by providing users with new tools to engage. Case in point: Facebook's recent update to its messenger app.

The new feature
Despite Facebook's recent announcement that it's acquiring WhatsApp, a multi-platform messaging service, in a deal valued at a jaw-dropping $19 billion, Facebook apparently still has plans for its competing Messenger app. In a recent update to the app, Facebook supercharged its group chatting.

Until now, users in Facebook's messaging app could message multiple people, but could not easily save their groups with unique identities. With Facebook's March 27 iOS and Android update, the company finally took tips from rivals, and added the important feature.

Fb Groups

Image source: Facebook.

As detailed in the latest update in the iOS App Store: "Now you can create groups for the people you message most. Name them, set group photos and keep them all in one place."

The new groups feature also allows you to add people to the conversation after it has started, giving them access to all previous messages, and notifying all the individuals in the conversation that someone has been added.

In addition to Messenger's new groups feature, the update added the ability to forward messages: "Want to send a message or photo to someone who isn't in the conversation? Just tap to forward it."

Facebook's next growth opportunity (and Twitter's, too)
While investors typically point to growing monthly active users and more effective advertising products as reasons for Facebook's fast-growing top line, Facebook CEO Mark Zuckerberg outlined another way the company can grow in its fourth-quarter earnings call.

"We're not just focused on improving the experience of sharing with all of your friends at once, although that's growing quickly, too. A lot of the new growth we see is coming from giving people the tools to share with different sized groups of people," Zuckerberg said.

This new growth can come in the form of entirely new apps, like Facebook's recent launch of Paper, or by improving sharing tools within existing apps. The groups feature within the Messenger app, for instance, will likely spark greater engagement within the app, and could even have a halo effect on Facebook's other closely connected products.

Twtr Photo Sharing

Image source: Twitter.

Twitter seems to be taking a similar route to encouraging greater engagement on its platform. With its recent addition of photo tagging for iOS that doesn't affect the limited 140-character count for Tweets, Twitter is making the platform more engaging for existing and new members.

New features, like groups for Messenger and photo tagging for Twitter, highlight yet another way social platforms can grow engagement and make their platforms more lucrative for advertisers. Investors in Facebook and Twitter should expect the platforms to continue to beef up sharing tools in the coming years. Why not? It improves the experience for users while also boosting a platform's value.

Three stocks to own for the rest of your life
As every savvy investor knows, Warren Buffett didn't make billions by betting on half-baked stocks. He isolated his best few ideas, bet big, and rode them to riches, hardly ever selling. You deserve the same. That's why our CEO, legendary investor Tom Gardner, has permitted us to reveal The Motley Fool's 3 Stocks to Own Forever. These picks are free today! Just click here now to uncover the three companies we love. 

Daniel Sparks has no position in any stocks mentioned. The Motley Fool recommends Facebook and Twitter. The Motley Fool owns shares of Facebook. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of fool.com.

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to www.fool.com/beginners, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at www.fool.com/podcasts.

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers