Can Amazon Threaten Facebook With “Anytime”?

Reports suggest that Amazon (NASDAQ:AMZN) is working on a messaging app called “Anytime” which could compete directly with Facebook’s messaging offerings such as Whatsapp and Messenger.  Amazon’s app is likely to be a comprehensive service allowing users to make voice and video calls, share photos (including filters and special effects), listen to music, order food and chat with businesses. These features appear to very similar to what Facebook wants its Messenger app to eventually be, and become the “go to” app for all user needs. While Facebook is looking to monetize its Messenger app this year via advertisements, the entry of a strong player such as Amazon into this segment can impact the former’s plans.  Facebook has more than 200 million users in the U.S., while Amazon’s Prime customer base in the U.S. is estimated to be around 80 million. While Amazon might have a lower base of loyal users, these customers are active on its platform and spend heavily on its website. Facebook’s U.S. user base may not necessarily be as active as Amazon’s, or as likely to carry out transactions through Facebook.

Strong Seller Network, Variety Of Services, Growing Loyal User Base

Amazon had nearly 2 million sellers worldwide on its platform in 2015 (the most recent publicly available data), and that number has likely increased since then. These sellers could potentially use the company’s messaging app to connect with users in order to resolve issues, if any.  Facebook, on the other hand, has more than 60 million business pages of which 4 million pages actively advertise on its platform.  Facebook is clearly ahead of Amazon in terms of he number of businesses and users on its platform; however, the latter has a wide range of services to offer, and a messenger app can help consolidate these services to make it more convenient for users. Further, Amazon’s users are more active on its platform, given that its Prime member base accounts for the highest spenders on its platform.  Apart from e-commerce, Amazon users can stream videos and music, print photos and use Alexa as a smart virtual assistant. Adding messenger abilities to this gamut of services can also allow users to connect with friends and family, share photos, make plans, book tickets and share expenses. However whether social media users would shift to Amazon (which is predominantly considered an e-commerce platform) for their messaging requirements remains to be seen. It might be difficult for Amazon to generate engagement levels similar to Facebook.

For now, Facebook remains in a dominant position in the social media segment. Players such as Google, which have messaging apps, have not been able to threaten Facebook for the most part, and it continues to grow users and engagement levels. Amazon’s messaging app could certainly be an appealing and convenient feature for its existing users, but whether it will be able to shift users away from Facebook is unclear. This could be a long term possibility, but it would likely be an uphill battle.

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