The newest app from the Creative Labs at Facebook (NASDAQ:FB) is called Notify. As the name implies, Notify sends notifications to users' lock screens. Users can get updates on breaking news in their area, top stories from publications they follow, weather updates, movie and TV clips, concerts playing in town, and more. It basically offers all the information-aggregating capabilities of Twitter (NYSE:TWTR), makes things easier to find, and pushes the content to your lock screen instead of asking users to open an app.
Notify represents just the latest effort from Facebook to move further into news, an area Twitter has long hung its hat on. Should Twitter investors worry about the newest Facebook app?
Notify isn't the real threat
If Notify were a stand-alone app from almost any other app company, it wouldn't be much of a threat to Twitter and its network of 320 million users. It's very unlikely that more than a few hundred thousands people will download Notify. Those numbers would be great for a small app company, but compared with Facebook's 1.55 billion users, it's pennies.
But Facebook can learn a lot from those users who do download Notify and integrate that into its flagship app. That's the real threat to Twitter.
Among Twitter and Facebook users, 63% say they get news from those respective services. However, Twitter still holds a sizable lead over Facebook when it comes to breaking news: 59% of news users on Twitter follow breaking news stories as they happen, compared with just 31% for Facebook.
Integrating Notify's breaking news alerts into Facebook's flagship product could help even those numbers. That means fewer people checking Twitter for updates because the updates already showed up from Facebook. As a result, Facebook could find itself with more advertising opportunities as users have one more reason to check in to the social network.
Notifications getting revamped already
Facebook is already testing a revamped Notifications section with select users. The new Notifications will show information such as local news and events, weather updates, movie times, and nearby restaurants. That information will be displayed alongside regular updates from users' networks.
The new Notifications tab doesn't send any more push notifications to users phones. Facebook's test with Notify may help it determine if push notifications are a feature users want for news stories, weather alerts, and more. If so, Facebook can turn on that feature with a flick of a switch after it's rolled out its new Notifications section to its flagship app.
Facebook already has tons of data on users' interests and can probably make good suggestions for what types of updates users might want on their phones. Twitter, meanwhile, has struggled to get users to follow more accounts to make their timelines interesting. It has less context about its users' interests, especially when signing up new users, and its suggested accounts and Instant Timeline features are often lacking. CEO Jack Dorsey even admitted during the company's second-quarter earnings call that the company's new features failed to increase retainment or user growth.
Should Facebook make a bigger push into news and notifications following Notify, it could have a negative impact on Twitter's engagement, especially around breaking news.
Adam Levy has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Facebook and Twitter. 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.