Facebook Wants to Be a Forum for Work, Too
Facebook (FB) on Wednesday soft-launched its long-rumored Work initiative with desktop, iOS and Android applications for select pilot partners -- thus far a private list of companies -- who want to repurpose the social network to actually get things done.
"I read these efforts to reach enterprise users as a big initiative, and one that is as important as consumer Facebook, Internet.org and advertising," Gartner (IT) analyst Brian Blau told TheStreet.
The Facebook at Work product is a workplace network -- with data private to each individual company network -- that still looks and feels like Facebook -- just no ads. "Facebook at Work is a separate experience that gives employees the ability to connect and collaborate efficiently using Facebook tools -- many that they're likely already using such as News Feed, Groups, messages and events," a company spokesperson told TheStreet.
Freemium Model Likely
The company is not currently thinking about monetization plans for Facebook at Work, the spokesperson said, but the opportunity to build a new freemium subscription revenue stream is clearly in play. For comparison sake, Salesforce (CRM) charges $15 per user, per month for the premium version of its enterprise social network Chatter.
"It's a good idea -- [it] makes tons of sense long term," Hudson Square analyst Dan Ernst said via email. Ernst noted that the easiest place to go is small businesses, "especially in emerging markets where LinkedIn (LNKD), Salesforce and Yammer have no play."
As it stands, Facebook has just two businesses: advertising and payments. In the third quarter, Facebook posted total sales of $3.2 billion, up 59 percent year-over-year, with its advertising business contributing $2.96 billion, or 92.5 percent, to the pot.
Into the Business World
Facebook doesn't need to charge for Work to enjoy some immediate fruits of its labor. The enterprise that starts working on Facebook will, of course, recruit its employees to the fold, and once operations are up and running, the company will be reluctant to leave. Facebook at Work, then, represents a gateway to the professional side of the Internet.
"Facebook has many product efforts on the consumer side of the business but fewer on enterprise, and this effort to socialize the workplace is one that not only fits well into Facebook's wheelhouse but also allows them to go after a very different type of customer," Blau said.
In that light, you can view Facebook at Work as not all that dissimilar in big-picture purpose than the social network's arsenal of standalone apps: Paper, Slingshot, Groups, Messenger and Rooms. They're all a part of the company's grander plan to recast itself as a network with something for everyone.
Artko Capital Director of Research Peter Rabover believes that though professional service companies such as law firms or asset management firms won't use it, but other companies may use it. "I can see it being a good idea for companies trying to use it internally, to build up corporate cultures, and internal brands," Rabover said via email. "It would be a good way for companies to network their employees, organize internal social events and even have an internal messenger system."
A Lot of Competition
The workplace collaboration market, however, isn't Facebook's for the taking. Even putting the social network's less-than-trustworthy reputation aside, Facebook is showing up to the office unfashionably late. The space is a complicated one with a smattering of competitors ranging from enterprise behemoths like Salesforce and Microsoft (MSFT), which operates Yammer, to enterprising startups such as Symphony, backed by Goldman Sachs (GS), and billion-dollar Slack.
Facebook brings a sense of familiarity to the table, but in creating workspaces distinct from Facebook proper, the social network seems to recognize that professionals don't want to merge business with pleasure. The familiar, then, doesn't exactly equate to a net positive. Facebook's known to be for friends and family. Do big businesses and their employees really want to see it in a different light?
The social network, said Blau, is entering a new product category that already has significant competition and usage challenges. That's not to be taken lightly, nor is the promise of great rewards. "Facebook at Work is a big move and one that I think over time -- as in a few years -- will become a important part of their business," Blau said. That is, of course, if Facebook can make it work.