Please ensure Javascript is enabled for purposes of website accessibility

Facebook Takes Aim at Zoom With New Video-Conferencing Features

By Keith Noonan - Apr 24, 2020 at 6:08PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Zoom stock dipped after the social media giant unveiled expanded video-chat features.

Facebook (META 1.70%) published a press release on Friday announcing the launch of Facebook Rooms -- a video live-chat service that will allow people to conduct calls with up to 50 people simultaneously. Calls on the service will have no time restrictions and can be accessed through either Facebook's namesake social media platform or Messenger -- and later, Instagram Direct, WhatsApp, and Portal.  

Rooms may not wind up being a big revenue generator for Facebook but could generate valuable data for other projects at the company and make it harder for specialized video-conferencing companies such as Zoom Video Communications (ZM 1.35%) to continue rapidly expanding their user bases. Zoom stock fell roughly 6% in Friday's trading.

People using Messenger Rooms video conferencing on mobile devices.

Image source: Facebook.

What's next for Facebook in video communications?

Facebook's massive global user base and wealth of resources put the company in good position to be a long-term leader in video conferencing. The video-communications space is growing quickly but also becoming increasingly crowded. While specialized providers like Zoom may continue to see strong user growth and engagement, they'll have to contend with tech titans that can tie video services to larger software and hardware ecosystems.

Facebook Rooms will use artificial intelligence (AI) to enable 360-degree panoramic backgrounds and generate lighting effects and will also have support for augmented reality (AR) filters like those popularized on Instagram and Snap's Snapchat. The company's Rooms press release notably mentions that virtual reality (VR) and augmented reality will provide more immersive platforms for visual communication in the future.

There's a good chance the social media giant will use experience and data from operating its current video-chat services to inform and support upcoming ventures in VR and AR.  

Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Keith Noonan has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Facebook and Zoom Video Communications and recommends the following options: short May 2020 $120 calls on Zoom Video Communications. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Meta Platforms, Inc. Stock Quote
Meta Platforms, Inc.
META
$180.50 (1.70%) $3.01
Snap Inc. Stock Quote
Snap Inc.
SNAP
$11.62 (4.59%) $0.51
Zoom Video Communications Stock Quote
Zoom Video Communications
ZM
$109.52 (1.35%) $1.46

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
400%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/13/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.