While regulators probe the competitive impact of Facebook's (FB) acquisitions of rival services, the social media giant is stepping up its efforts to blur the lines between its biggest platforms.
On Friday, The Information reported that Instagram and WhatsApp, which to date have maintained brands that are completely distinct from that of their parent company, will soon be officially named "Instagram by Facebook" and "WhatsApp by Facebook." The new names will reportedly appear both in print within the Instagram and WhatsApp apps, and also on their listings within the App Store and Google Play.
The Information's report arrived just a day after The Wall Street Journal reported that -- as part of a broader investigation of Facebook -- the FTC is probing Facebook's acquisitions to "determine if they were part of a campaign to snap up potential rivals to head off competitive threats."
Assuming Facebook does plan to rebrand Instagram and WhatsApp, the move would simply be the latest in a series of initiatives meant to tie Instagram and WhatsApp more closely to Facebook's core service and/or Facebook Messenger, which relies on Facebook user IDs and has been closely integrated with core Facebook from the start.
In March, Mark Zuckerberg announced (following reports to the effect) that Facebook plans to integrate and support end-to-end encryption across Instagram, Messenger and WhatsApp's messaging services, so that consumers and businesses using one service can quickly communicate with ones using another. He also predicted that in a few years, "future versions of Messenger and WhatsApp [will] become the main ways people communicate on the Facebook network."
Three months later, the Facebook-led Libra cryptocurrency project, which has some intriguing potential use cases in emerging markets and in the digital content world, was unveiled. Notably, Facebook plans to support Libra through a subsidiary known as Calibra, and plans to make Calibra's digital wallet services available via both Messenger and WhatsApp, in addition to a standalone app.
In addition, Zuckerberg and other Facebook execs have been signaling that their company is working to enable new, cross-platform, payments and commerce experiences outside of Libra. "In the future, we'll enable people to use the same payments account to send money to friends and businesses on WhatsApp, shop on Instagram or make transactions on Facebook," Zuckerberg said on Facebook's Q2 earnings call.
As it is, Facebook has done a lot to integrate its core service with Instagram, and has also taken a step or two to integrate it with WhatsApp. Among other things, Instagram will point users towards accounts belonging to Facebook friends, and gives Instagram Stories users the option to cross-post content to the less popular Facebook Stories service. Meanwhile, Facebook advertisers are able to run cross-platform campaigns across Facebook and Instagram's services that leverage a common set of advertising tools and user data, and businesses purchasing Facebook news feed ads can add a button to their ads that lets consumers contact them via WhatsApp.
However, from the perspective of the average user, Instagram and WhatsApp are still viewed as independent brands. Indeed, a large percentage of consumers are unaware of who actually owns the platforms.
From Facebook's perspective, this lack of awareness has in many ways been a good thing, since it has shielded Instagram and WhatsApp from the various controversies that have stung Facebook's brand and public image. But in the event that the FTC and/or other regulators file suit to break up Facebook, public perceptions of the platforms as being fully independent of Facebook, together with the limited integration that exists for their consumer services, could hurt the company's attempt to defend itself before the public.
In that context, making an aggressive push to both tie Instagram and WhatsApp's brands to Facebook's, and roll out major cross-platform messaging and payments services could strengthen Facebook's hand if it has to make a case before federal courts that forcing it to divest itself of Instagram and WhatsApp wouldn't benefit consumers, and would also be very difficult to do on a practical level. While it's quite unlikely that such considerations are the only reason Facebook wants to, say, integrate its messaging services or offer cross-platform payments services, chances are that its leadership has taken them into account.
For now, the odds of a Facebook breakup still don't look very high. It's far from clear at this point that the FTC will push for such a move, and in the event that it does, it will still have to sell federal courts on the merits of its case.
Nonetheless, Facebook does now seem more eager to take pre-emptive measures in the event that it has to fight to hold onto two of its most valuable assets.