Page 283 - The Digital Financial Services (DFS) Ecosystem

ITU-T Focus Group Digital Financial Services
Ecosystem

• Advertising (mobile primarily and web) = 30.2 per cent

• Other (merchandise primarily) = 5.0 per cent
Other social network revenue models include transaction fees (ordering coffee, scheduling taxi rides, etc.),
and facilitating phone calls to individuals outside the social network’s network.
#2 – Diversification strategy for Facebook

Consumers are fickle and can cause social networks to go into a "death spiral" – a reverse network effect in
which users leaving the social network worsen the experience for users still on the social network. Facebook
has this risk, particularly with the younger demographic who do not consider Facebook ‘cool’ and who do not
want ‘grandma commenting on their posts.’

Figure 21 – Social networks importance to teens

But teens do use Facebook Messenger. In 2014, Facebook separated Messenger from the traditional Facebook
application. So, a teenager can launch Messenger without experiencing Facebook’s reputational baggage.
To maintain revenue, Facebook must monetize Messenger. In April 2016, Facebook announced the beta
version of Messenger platform. In Facebook’s vision, communication between businesses and consumers
should occur within Facebook Messenger. Consumers would be able to reach all of the businesses they need
and communicate with them in a familiar way. The Messenger platform includes developer tools to facilitate
this transition: Templates, user interface controls, and artificial intelligence tools for application development.

#3 – Disrupting the mobile OS and communications industry
Chat platforms could reduce the importance of Google and Apple within mobile ecosystems. Google and
Apple’s control of mobile operating systems gives them great power. These giants typically receive 30 per
cent of the revenue from mobile apps sold – resulting in an estimated $10B in revenue from the $30B+ in
global 2015 sales. Chat providers see an opportunity to change the paradigm so that chat, not the mobile
OS, is the platform. Users would no longer download and install apps on their phone, but instead access that
same functionality through their chat application. If this happens, the chat platforms become the gatekeepers
and monetizers that connect consumers and businesses. The mobile OS essentially becomes an invisible
commodity/layer.

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