CEO Mark Zuckerberg has talked for years about his vision for Facebook (FB +0.28%), and much of the discussion has involved transforming the world's most popular social media site into a global communication portal. It's clear following Facebook's latest F8 dev conference that Zuckerberg and team are well on their way to making his dream into a reality -- virtual and otherwise.
Rumors had been swirling ahead of 2016's F8 gathering that Facebook would demo its latest, greatest artificial intelligence (AI) solutions, virtual reality, and enhanced video functionality: all of which came to fruition. But Facebook didn't stop with the expected, it's further along in improving its search capabilities than some may have expected, even to the point that Alphabet (GOOG 0.84%) (GOOGL 0.59%) should stand up and take notice.
Image source: Facebook.
Who needs Google?
With over 900 million monthly active users (MAUs), Facebook's Messenger is one of the most popular messaging apps in the world. It's only competitor of note is Facebook's WhatsApp, which recently topped the 1 billion monthly user mark. News that Facebook is testing ads on Messenger should be music to the ears of long-term investors who have been patiently waiting for it to be monetized.
But don't expect widespread adoption of Messenger ads anytime soon. Facebook is infamous for its comprehensive testing of any changes before mass introduction. But when ads are finally fully rolled out, Facebook revenue will almost certainly enjoy a significant jump.
Facebook also confirmed the widely rumored introduction of AI-powered bots to Messenger. In addition to the obvious features, including automated content such as weather, directions, and the like, the new functionality may also test Alphabet's Google search giant. Imagine the nearly 1 billion MAUs on Messenger simply "asking" the service where the closest restaurant or gym is relative to their location, without leaving the app?
No need to "Google" much of anything, and with so many users already on board, an AI-driven search function could be a real thorn in Alphabet's side. And the AI bots will also "improve" as they learn each user's unique needs and desires over time. The impact of Facebook's bots will change the messaging landscape forever.
Oculus: phase two
As expected, Facebook unveiled virtual reality (VR) tools using its recently available Oculus Rift headset. Facebook fans will recall when Zuckerberg first announced the $2 billion deal for Oculus he said that the VR leader would initially target the world's gamers, but that was just the beginning. As Zuckerberg put it, "This [Oculus] is really a new communication platform." It appears Facebook is fulfilling its initial objective.
Facebook's demo of its early "social VR" efforts was mind-blowing, and the ramifications for the future of the site transforming itself into an immersive "communication platform" are limitless. Imagine being able to virtually transport oneself to anywhere in the world, wander around, check out the sites, and even take a "virtual" selfie. Facebook's new social VR unit is making big strides, and the fact it will require the purchase of a Rift headset is a nice, revenue-enhancing bonus.
Incorporating video into the Facebook experience has been an unmitigated success, both from an ad revenue perspective as well further engaging its 1.59 billion MAUs. And Facebook's stellar engagement levels -- over 1 billion "friends" access the site daily -- will improve with its new Surround 360-degree camera system. Not only does the new system produce "sharp, truly spherical footage in 3D," utilizing 17 cameras should reduce the time and effort needed to produce Facebook-ready footage. Facebook said its Surround 360 system will be available to developers via online repository GitHub this summer.
In all, 2016's F8 was an unmitigated success and provided devs and Facebook fans alike a glimpse of the future. And that future starts now.
