Tags: Facebook | Houseparty | monopoly | advertising

WSJ: How Facebook Kills Startup Competitors in Their Cradles

Image: WSJ: How Facebook Kills Startup Competitors in Their Cradles

By    |   Wednesday, 09 Aug 2017 02:57 PM

Facebook keeps tabs on startup technology firms to identify which ones may pose a threat to its dominance in social media, The Wall Street Journal reported. The social network uses that information as part of a strategy to copy the technology in its mobile applications. 

Facebook tracks smartphone usage with technology acquired from Tel Aviv-based startup Onavo, which created a mobile application to protect user privacy by sending data traffic through private servers. The app gives Facebook detailed information on what users do on their phones, current and former employees told the newspaper.

Facebook, which has 2 billion users worldwide and deep pockets, is focused on developing video chatroom technology after identifying a potential threat from app startup Houseparty. The company in February 2016 introduced an app that lets a small group of friends drop into a video conversation as if meeting informally. The app is particularly popular among teens who like Snapchat, the image-messaging app that has been copied by Facebook.

Houseparty “is one of the cool new apps — a good example of somebody who is challenging the status quo and may have success in a certain age group,” Verto CEO Hannu Verkasalo, told the newspaper. But Facebook, Google and Apple “are extremely monopolistic,” he says. “It’s very difficult to break in.”

Facebook plans to launch an app similar to Houseparty in the fall, people familiar with the project told the WSJ. The app is known as “Bonfire” within Facebook.

Houseparty, which has 1 million monthly users, raised an additional $50 million in December to have a war chest as competition from Facebook loomed.

Two of Houseparty’s founders, Sima Sistani and Ben Rubin, have faced off against Facebook before. They developed Meerkat, one of the first live-video-streaming apps. Its downloads plunged after Twitter removed the app from its platform, and Facebook debuted its own live video service.

“I have no problem with the copying,” Rubin told the WSJ. “It’s just business. It’s just a distraction.”

© 2017 Newsmax Finance. All rights reserved.

   
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Facebook keeps tabs on startup technology firms to identify which ones may pose a threat to its dominance in social-networking, The Wall Street Journal reported.
Facebook, Houseparty, monopoly, advertising
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2017-57-09
Wednesday, 09 Aug 2017 02:57 PM
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