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Does This Mean Facebook Will Also Put Ads in WhatsApp?

By Evan Niu, CFA – Feb 19, 2016 at 7:00PM

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Facebook is reportedly about to introduce ads into its Messenger platform.

Yesterday, TechCrunch reported that Facebook (META 1.36%) is preparing to insert ads into its popular Messenger messaging platform. The change could come as soon as the second quarter, which is just a couple of weeks away, and the news comes shortly after Facebook announced in January that Messenger now has over 800 million monthly active users.

Does this have any implications for Facebook's other popular messaging platform, WhatsApp?

Don't shoot the Messenger
The way the ads are expected to work is that companies will be able to send sponsored messages to users that have previously initiated a chat with the company. So, it won't be an entirely random affair, where users are getting spammed with irrelevant advertisements they never signed up for. Facebook told TechCrunch it works hard to make sure users don't receive "unwanted messages of any type," while declining to comment on the report itself.

Facebook has already outlined plans to transform Messenger into a customer service platform as part of its monetization strategy, which makes plenty of sense. People already often take to Twitter (TWTR 3.87%) for customer service, which is a little odd when you're trying to describe an issue in detail and you have to break it up into 10 tweets because of the arbitrary character limit. And it's all public, too, which inherently limits the types of service interactions you might be willing to engage in for the world to see.

Messenger would be an ideal platform for businesses to interact with customers for service, but ads might be a little obnoxious, depending on how they are implemented. It's conceivable Facebook will keep the ad load relatively low and perhaps highly target them to ensure more relevance. As always, it'll be a tough balance.

What's up with WhatsApp?
Potentially putting ads in Messenger also has some possible implications for WhatsApp. Facebook has always said it would focus on monetizing the service once it reached 1 billion users. Well, guess what? That happened earlier this month, shortly after WhatsApp announced it was removing the nominal $1 per year subscription fee and going completely free.

At the time, WhatsApp reiterated that it still has no intention of ever introducing third-party ads. This echoes sentiments that WhatsApp founder Jan Koum had expressed when Facebook acquired the start-up -- sentiments Mark Zuckerberg agreed with. WhatsApp did say it was pursuing a similar enterprise path, where it hopes to connect businesses with consumers as a service platform. The company will start testing out tools this year.

Still, what if it boils down to a semantic distinction? Does a business you've interacted with count as a third party? What if that business wants to send you a sponsored message? Hopefully the answer is no, but only Zuckerberg knows for sure.

Evan Niu, CFA, owns shares of Facebook. 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.

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