Facebook Inc., (NASDAQ:FB) Faces Competition From Wechat; Is Optimistic About Instagram
Denver, CO, 07/30/2013 (Avauncer.com) – Shares of Facebook Inc., (NASDAQ:FB) rose 3.79% to close at $35.29 in its last trading session. This was close to the higher range of its 52-week price range of $17.55 to $35.31. Shares also remained heavily traded, with 95.68 million shares being traded, up from the average volume of 47.78 million shares.
Facebook faces severe competition from a Chinese instant messaging application developed by Tencent, named WeChat. The internet giant, which came into existence in January 2011 has gained popularity not only in China but worldwide too. The company already has 300 million users, with 70 million users overseas. Tencent is further into global expansion, giving a competition to the 819 million mobile monthly active users, which alone accounts for 41% of its total revenue.
What can trouble the company more is that Asia has accounted for its largest user base, and a chat company located in Asia can give it a tough competition in the near future. The latest revenue figures too reveal that figures have doubled since last year to a whopping $135 million. Asia will continue to remain a strategic area for the company, in terms of new signups, increased user engagement and more advertising. WeChat is now the second largest message application, right after WhatsApp. Tencent is also planning to explore WhatsApp, news which can affect the market base of its arch rival WhatsApp.
However, since it’s a startup venture, Tencent has had financial burden in recent times. It had recently thought of levying charge on WeChat users, but later dropped it. This charge was to counter the financial burden imposed by telecom operators.
Management at Facebook has announced its success of its venturing into Instagram, which has witnessed impressive growth. The service is growing at a faster pace, and the company may monetize it, in view of its rising popularity.