Rumors have been swirling for some time now that Facebook (NASDAQ:FB) CEO Mark Zuckerberg and team were working on a business app to take on the likes of Microsoft (NASDAQ:MSFT) with its Office 365 suite and Google (NASDAQ:GOOG) (NASDAQ:GOOGL) Docs, among its other solutions. Turns out, rumor became reality a few days ago when Zuckerberg expanded the testing of its new "Facebook at Work" app for iOS and Android smartphone devices.
In many ways, Facebook in the workplace is a no-brainer: the meteoric rise of upstart collaboration tools like Slack -- which has already been valued at as much as $1 billion -- have made it clear businesses are looking for ways to better manage internal communications. And with its whopping 1.35 billion monthly average users, or MAUs, of which over 1.1 billion are mobile, there is certainly user familiarity working in Facebook's favor. But taking on Microsoft, Google, and the other business collaboration tool big boys? That's a tall order, even for Facebook.
Facebook at Work, the early stages
In what has become par for Facebook's course, its "Work" app isn't ready for prime time, but will be rolled out to a growing number of select partners during its beta testing phase. Apparently, Facebook already had about a dozen folks testing Work late last year, but has since expanded its test group even further.
When will Work become available to the masses? No one's saying, and if the much-anticipated roll-out of video ads and monetizing Instagram are any indication, Facebook isn't going to roll out Work until it's good and ready. Still, the opportunities are many and the potential almost limitless as Facebook toys with the notion of opening an entirely new revenue opportunity.
Work is a collaboration tool and its "Groups" function could, conceivably, replace business email communications and the ever-growing lists that accompany many business email accounts. The plan is for Work to look and feel much like Facebook's social media platform, a significant plus that should make user adoption a snap considering most everyone on the planet is at least familiar with its look and feel.
Though plans are to launch Work as a free app once it's ready to go mainstream, that's not likely to last. Why? Because Facebook said Work won't subject business users to advertisements: the driving revenue force behind its flagship social media app. Giving Work away, at least initially, could also help jump-start its introduction into what is already a crowded field that includes the aforementioned Microsoft Office and Google's business-related solutions.
In addition to its collaboration capabilities, Work also allows users to "connect" with professional contacts outside its own business walls, much as LinkedIn (NYSE:LNKD.DL) does. With just 332 million members as of Q3, LinkedIn is about one-quarter the size of Facebook, and could feel the effects of Work as much, or more, as Microsoft or Google. If Work really takes off, it wouldn't be surprising to find Facebook expanding its features to include even more LinkedIn-like features and with such a huge base of MAUs, Work could really hit LinkedIn where it lives.
The biggest hurdle
Like any new foray, Facebook Work will face some challenges gaining wide-scale adoption. Certainly entrenched competition from industry-leaders tops the list of hurdles, but privacy concerns will be right up there, too. To address that, Facebook has said it will not track Work user's activity, nor will it meld business and private usage data. That's well and good and should help appease some techies considering launching Work for their companies, but privacy is always a primary issue in the workplace, and Facebook's reputation for data collection and usage won't work in its favor.
Can Work replace Microsoft's Office 365 or Google Docs in the workplace? No, the two solutions are too entrenched and offer functionality well beyond Work's collaboration and Groups communication features. But Work doesn't have to supplant Office or Docs to be successful: gaining a decent piece of Microsoft and Google's business market share will be enough to warrant Facebook's time and effort.
As for LinkedIn, Facebook Work could cause some serious problems down the road, particularly if its well-received and expands its functionality. That won't happen next month, or even next year, but LinkedIn fans should keep tabs on Work. Bottomline, Facebook's Work app could find a nice little niche in what is quickly becoming a fast-growing market. Now add Work to its already long-list of future growth drivers, and investors have yet another arrow for Facebook's quiver.
Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Facebook, Google (A shares), Google (C shares), and LinkedIn. The Motley Fool owns shares of Facebook, Google (A shares), Google (C shares), LinkedIn, and Microsoft. 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.