With 800 Million Users, Could Messenger Become Even Bigger Than Facebook?

This post originally appeared on Contently's The Content Strategist.

“Messaging is one of the few things that people do more than social networking.” — Mark Zuckerberg, in a public Q&A in November 2014

Apple has long been lauded for its willingness to cannibalize its own products—the MacBook ate the iMac, the iPhone ate the iPod, etc. Now, we another Silicon Valley giant following the same game plan: Facebook.

Increasingly, it looks like the next big thing in social media won’t be a Facebook competitor, like Twitter or Snapchat, or even a high-profile Facebook acquisition, like Instagram or WhatsApp. Instead, there’s a damn good chance the big story of 2016 will be Messenger, the home-grown chat app, which is quickly becoming the most exciting part of the Facebook empire.

On the morning of January 7, David Marcus, Facebook’s vice president of messaging products, released a detailed update on Messenger’s accomplishments and goals for 2016. It included some notable highlights. For example, Messenger has grown to 800 million users, a huge increase from 200 million users less than two years ago, when it was completely split out from the Facebook app. It’s on a path to replace the phone number and apps all together—redefining the way consumers interact with businesses in the process. And Facebook has big plans for its AI assistant, M, which could soon make Apple’s AI assistant, Siri, look prehistoric.

There are reasons to be incredibly optimistic about Messenger. Its growth, resources, and advantages are unparalleled. Its potential is bigger than anything Mark Zuckerberg ever imagined for Facebook. At the same time, though, there are reasons it could eventually fail.

The ultimate chat app

To understand where Messenger is headed, you need to look beyond North America.

On a global scale, the exploding popularity of chat apps has been the biggest Internet phenomenon since Facebook. It might be even bigger. Worldwide, WhatsApp has skyrocketed to 900 million monthly active users, a figure Messenger is on pace to hit by spring. WeChat, wildly popular in Asia, has 600 million regulars, and a slew of other chat apps, including Kik, Viber, Line, and Snapchat, have all surpassed 200 million monthly active users.

Overall, the projected growth is staggering, with 2 billion people projected to use messaging apps by 2018.

While chat app usage is really starting to boom in North America, it’s been maturing for years in Europe and Asia, largely out of necessity. Due to prohibitively expensive SMS rates, people had to find another means to communicate. In contrast, carrier plans in North America made SMS affordable, thus decreasing the early need for chat apps.

In Asia, however, chat apps have grown far beyond text messaging, essentially replacing the need for apps or websites altogether. Weixen, the Chinese version of Tencent’s WeChat app, “enables 600 million people each month to book taxis, check in for flights, play games, buy cinema tickets, manage banking, reserve doctors’ appointments, donate to charity, and video conference,” as Wired detailed in its excellent profile of Messenger this past fall.

That’s what Peters, as Facebook’s head of messaging, is building towards: a world where commerce, services, and communications are all completed in a chat thread instead of through a clunky combination of mobile sites and apps.

“How people see interaction inside mobile phones hasn’t changed since flip phones,” he told Wired. “You have a keypad to dial, a phonebook icon to access contacts, another for messages, and one for your voicemail. It’s app-centric, not people-centric. If today no phone existed, you wouldn’t create an app-centric view of the world, you’d create a people-centric view. With Messenger, everything you can do is based on the thread, the relationship. We want to push that further.”

"You never lose context, and the business never loses context about who you are and your past purchases. It removes all the friction.”

So how does this work? Marcus gave the example of a trial Facebook is running with KLM, one of several airlines experimenting with Messenger. The aim: Create an experience where booking a ticket is as seamless as if your best friend worked for the airline and was dedicated to helping you get everything you need.

“When you book a ticket, you get a nicely structured message inside Messenger from KLM with your itinerary,” Marcus explained. “You get an interactive bubble when it’s time to check in, and you get your boarding pass, your updates on gates, delays—and if you want to change your flight, you type that in the thread and they do it for you right there and then. Once you interact with a business, you open a thread that will stay forever. You never lose context, and the business never loses context about who you are and your past purchases. It removes all the friction.”

Everlane is doing something rather similar, reports BuzzFeed. After you make an online purchase, the retailer offers to send a receipt through Messenger. It also sends a picture of the item and a bubble that updates with its shipping location. And if you text back that you want another t-shirt in another color, for instance, Everlane already knows your size, shipping details, and payment information, making the process seamless.

In his January 7 post, Marcus crowned message threads as “the new apps.” He imagines a world where you can easily interact with all your favorite brands and services through chat threads in Messenger—eventually fulfilling that people-centric philosophy for customer service.

Additionally, Messenger has the potential to be the most powerful chat app for peer-to-peer interaction. As highlighted in the graphic above, Messenger already allows users to send GIFs, transfer money, edit photos, and conduct audio and video conference calls, while offering a directory of Facebook’s 1.5 billion users. That means you can send a message request to just about anyone, as long as you know the person’s name. This ubiquity gives Messenger a huge advantage. After all, you’re much more likely to use a chat app if all your friends are on it.

Even Ted Livingston—the founder of Kik, Facebook’s primary messaging app rival in North America—admitted that he’s concerned this inherent advantage is insurmountable. “To be honest, I do [worry],” he told me. “I get to talk to people at all the other major tech companies in the Valley—Twitter, Google, Microsoft, Amazon, Yahoo. They just don’t understand what’s going to happen in chat. They just all are totally underestimating where chat is going. Facebook completely gets it.”

The M factor

In October, BuzzFeed reporter Alex Kantrowitz began captivating the tech world with his chronicles of his “Life With M,” Facebook’s new AI assistant for Messenger. You could take care of a variety of tasks like booking flights, getting Star Wars tickets, even reducing your cable bill. It looked like the smartest AI the world had ever seen, a giant step toward the technology depicted in the movie Her.

The caveat: M, rolled out to only a few hundred users in August, is not pure AI. It has human trainers that review each AI response, and if the responses aren’t good enough, the humans revise it, allowing the AI to learn what went wrong.

“With every single one of these interactions, that data is fed back into that AI instance that will then use the data to learn how to automate more and more answers or how to get better and better at those things,” Marcus told Kantrowitz.

The idea is that as the program slowly ramps up and the AI continues to learn, Facebook will see what M can and can’t do, before limiting or expanding the functionality accordingly.

“I think we have a good chance [at scaling]. Otherwise, we wouldn’t be doing it,” Marcus said. “It’s going to be hard work and it’s going to take a long time.”

It’s easy to see why Facebook is pouring so much into M, even if the payoff won’t come for a few years. It has the potential to be the AI assistant of everyone’s dreams, the go-to mechanism for searches, purchases, communication, and more. M ties in perfectly with Facebook’s dream of making Messenger the epicenter of online commerce and customer service.

How Messenger could fail—and who could beat it

While Messenger sits miles ahead of its competition in the Western world, it could still falter. The big red flag? Millennials and Gen Z, two groups most likely to start using messaging apps in full-force, won’t adopt Facebook’s Messenger.

Although Messenger’s ascension to 800 million users is impressive, it’s unclear how much people are using it. Is Messenger the app young people will use to chat with all their friends, or do they just use it when they get a message from Mom or Uncle Frank?

A recent poll from Way Up found Messenger to be the fastest-declining app in popularity among college students by the end of 2015.

In the U.S., Messenger lagged behind chat app competitors in terms of time spent per user, per the tables below pulled from Fred Wilson’s blog.1 If you do the math, Messenger gets 236 minutes of use per user. Snapchat is at 272 and Kik is at 297, only trailing Instagram in the top 25.

(#14 was excluded because of an accounting error.)

Additional data provided to me on background showed Messenger consistently trailing Kik and Snapchat in terms of market share among U.S. teens by a factor of seven to eight between May 2014 and May 2015.

Facebook’s worry, ultimately, has to be that it won’t be able to win over young consumers who have grown up using chat apps, and therefore won’t get enough older users to adopt chat apps as the main way they use the Internet.

That’s what Kik is hoping, at least. With 240 million users, Kik has long been popular among teens and pre-teens. Forty percent of U.S. teens use it daily, in part because it doesn’t require a phone number to join, making it perfect for a kid who just got handed his mom’s old iPhone. Kik is building a similar platform ecosystem as Facebook—albeit without such deep resources—and hopes that its teen appeal will help it carve out a niche to guard against a Messenger takeover.

“We don’t need to do this for everybody,” Livingston said.

Livingston sees teens, new to interacting with brands and buying products and services online, as the demographic most likely to start using chat apps for everything. In this respect, he likens them to users in Asia coming online for the first time through mobile phones.

“The thing that gets really exciting is that combination of platform with the teenage demographic,” he said. “If you look at an American adult, they already shop at Amazon. They already bank at Chase. They already get taxi rides from Uber. The idea that they can now get these services that are two to three times better through chat is not enough to switch them. I’m not going to switch from Amazon to Walmart because I can chat with Walmart. Yeah, it might be a bit better, but f*ck it, Amazon is good enough.”

Outside of the U.S., however, there is a much different dynamic.

“[China] had all these people coming online for the first time through their smartphone, through chats, through WeChat, so they didn’t have to get them to switch where they shop, or switch where they got packages, or switch where they got financial services,” Livingston said. “They just had to educate them on which services to get in the first place. That’s why we’re really excited about the North American teenager.”

The early returns are promising. Kik already gets teen users to chat with brand bots, an advertising offering that companies like Skullcandy have experimented with. According to a survey by market GlobalWebIndex, nearly a third of Kik users interacted with a brand on a chat app in July 2015, compared to 13 percent of Messenger users. Livingston seems content to focus on that demographic.

Boosting Kik’s prospects of catching Messenger is the fact that Tencent, the social networking giant behind WeChat, invested a $50 million stake in Kik this summer, prompting speculation that Kik could soon start offering many of the same services—flights, taxis, banking, movie tickets—that WeChat offers in China.

Ultimately, though, it’s hard to bet against Messenger becoming the biggest thing since Facebook, possibly eclipsing its parent social network in power in the not-too-distant future. Messenger is closing in on 1 billion users this year, Marcus is developing it with one of the best tech teams on Earth, and Facebook’s resources are nearly impossible to match.

“I believe that messaging is the next big platform,” Marcus told Wired. “In terms of time spent, attention, retention—this is where it’s happening. And it’s a once-in-a-generation opportunity to build it.”