"Today we're going to do something a little different," Facebook (NASDAQ:FB) CEO Mark Zuckerberg told the audience at its annual F8 developers conference. "We're going to walk through our roadmap for the next 10 years."
In the span of less than thirty minutes the CEO outlined his plans for the next decade, including a nice slide to go along with it.
The slide itself isn't very informative, but it revolves around a pattern of developing new technologies, creating products around those technologies and building them to scale, and then developing ecosystems around those products. The goal of each new thing Facebook creates is to "give everyone in the world the power to share anything they want with anyone."
As long-term investors, we appreciate it when a CEO has a long-term outlook as well. Let's take a look at what Zuckerberg thinks he and his team will be able to accomplish over the next decade.
Building ecosystems in the near term
Facebook's flagship app has a thriving ecosystem of businesses and developers on its platform. Over 50 million businesses use Pages on Facebook to connect with customers. The number of developers using Facebook's developer tools is growing rapidly, up 40% year over year.
Such a huge ecosystem has allowed Facebook to make a lot of money from advertising, its biggest source of income. Businesses pay to promote themselves on the social network and developers use its ad tools to monetize their apps or mobile websites and Facebook takes a cut. Last year, the company generated nearly $18 billion in ad revenue.
In the near term, Facebook is developing ecosystems for Messenger, launching Messenger Platform at F8. Messenger Platform is kicking off with bots, which represents another way for Facebook to get businesses and consumers connected on Messenger. It also includes an API, so businesses can integrate Messenger into their native customer service. Both options may open opportunities for developers to create new and interesting products.
More products in the pipeline
Consider that at 1.6 billion monthly active users, Facebook is already bringing in $18 billion in revenue. It thinks it can scale all of its products to 1 billion users, and it has a lot of products.
WhatsApp is already at 1 billion.
Facebook Groups also has 1 billion users.
Messenger is close behind at 900 million.
500 million people watch videos on Facebook every day.
400 million people use Instagram.
Facebook sees more than 1.5 billion searches on its platform every day.
And there are more products in the pipeline. The company just launched the Oculus Rift, and it's planning to launch Facebook at Work this year.
The interesting thing about Zuckerberg's plan is that it implies that as more users start using its various products, the average user will spend more time on that product. That's because it will build out an ecosystem to make the product more useful or interesting.
If more of your friends are using a social app, you're likely to use it more. If more businesses offer customer support through a messaging app, you're likely to use it more. If more fun apps exist for a platform, you're likely to use it more.
So, as Facebook develops these ecosystems around its newer products, it should see average engagement grow. That means the potential for revenue is even bigger.
Working today for next decade
Facebook is currently working on three main technologies it thinks will help further its goal of allowing anyone to share anything with everyone. It's developing new ways to increase Internet connectivity with drones, satellites, and laser connectivity. It's developing new artificial intelligence hardware and software, and it's investing heavily in virtual and augmented reality.
All of these technologies already have basic products -- Free Basics, Facebook's new automated alt text that helps blind people understand what's in pictures, and Oculus Rift. But these products are still in their relative infancy.
Most of the technology that Facebook is working on directly ties into its flagship platform. But ultimately, they could spawn entirely new products. Facebook increased its research and development expense 80% last year, and it doesn't appear to be slowing down.
The company's main app is currently fueling its growth, but in ten years the flagship app's growth may stagnate with revenue growth coming from something else entirely. Facebook's roadmap and strategy for the next decade is designed to protect investors from being overly reliant on a single product.