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Speculation is rising that Facebook ( FB ) will open its Messenger chat service to content publishers and advertising, creating a big multi-billion-dollar revenue opportunity and posing a growing threat to Alphabet ( GOOGL ). It’s a battle of stock market champions — both companies get a top IBD rank. Additions to the Messenger instant messaging platform are expected to be unveiled when Facebook holds its annual F8 developer’s conference April 12-14. Richard Windsor, an analyst at Edison Investment Research, said in emailed comments that Facebook’s top new announcement will be the opening of its messaging platform to allow publishers to distribute their content on Messenger. That could enable publishers to engage in direct conversation with users of Messenger and open the door for advertising sales pitches or product upgrades. “We suspect that Facebook will actually go much further and open up the platform entirely to developers to allow other functions within the messaging platform,” Windsor wrote. He expects Facebook will use its messaging platform to creating thriving multiplayer gaming environments, which would accelerate its move to add both media consumption and gaming to its digital content services. The goal would be to entice uses to do more with Facebook than just social networking and instant messaging. “This is the key to changing from being just an app into a fully-fledged ecosystem where users spend an increasing amount of their digital lives,” he wrote. The result is that Facebook would have a greater opportunity to monetize its 1.5 billion users and the 800 million users on Messenger. Facebook still has a very long way to go, but once this is complete, Windsor estimates Facebook will have the capacity to generate over $40 billion in revenue, compared to the $18 billion it generated in 2015. He also said Facebook’s apparent direction is why it’s emerging as Alphabet’s No.1 competitor, “as a large piece of this new opportunity that it hopes to generate is likely to come from Google.” Facebook has already expanded Messenger’s utility to include allowing users to send money to others, though Facebook currently does not charge a fee for the service. It’s also testing a feature that allows people to book an Uber ride through Messenger. More transportation services will be coming to the platform soon, including airlines, Facebook said. Nomura analyst Anthony DiClemente said in a research note Thursday that an advertising network which Facebook announced two years ago is gaining on a similar platform from Alphabet. The ad platform, called Facebook Audience Network (FAN), uses Facebook data to help advertisers place ads across multiple websites, beyond Facebook. FAN is in direct competition with AdSense and AdMob from Alphabet. DiClemente estimates FAN will add $2 billion to Facebook revenue in 2016, more than double that of 2015. The emerging growth drivers of FAN and Messenger will complement the strong revenue growth Facebook is getting from Instagram and video ads, he wrote. DiClemente raised his price target on Facebook to 135 from 125. Facebook stock fell 1.1% in the stock market today to 108.39. It hit an all-time intraday high of 117.59 on Feb. 2. The company gets a best-possible Composite Rating of 99 from IBD. So does Alphabet, which slipped 0.2% Friday to 730.22. Alphabet hit an all-time high of 810.35, also on Feb. 2. Image provided by Shutterstock . Scalper1 News
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