SAN FRANCISCO – As Mark Zuckerberg begins to switch Facebook to private messages and away from public sharing and open conversations, the vision he has outlined for the future of social networks already exists – just not in the United States.
Instead, it's a reality in China through a messaging app called WeChat.
Developed by the Chinese internet giant Tencent in 2011, WeChat allows people to be notified via one-to-one texts, audio or video calls. Users can also create groups of up to 500 people at WeChat to discuss and debate today's issues.
"WeChat has finally shown that private messages, especially the small groups, are the future," said Jeffrey Towson, a professor of investment at Peking University. "It is unprofitable to do business and life. It has shown the path."
What is happening in China gives guidance to not only how Facebook can do its shift, but how the Internet can change more. Many of Silicon Valley's tech giants are dependent today on online advertising to earn enough money to continue to grow and innovate on new services. Some call online ads the lifeblood of the internet.
But WeChat, which has 1.1 billion monthly active users, shows that other models – especially those based on payment and commerce – can support large digital businesses. It has implications for Google, Twitter and many others, as well as Facebook.
Of course, WeChat has its own mistakes. The messaging app is heavily censored due to claims by the Chinese government.
Facebook and Tencent did not immediately respond to requests for comments.
Herr. Zuckerberg didn't show much this week about how the change in private messages will affect Facebook's business, which relies on people sharing public posts to serve them targeted ads. In a blog post, he said that Facebook would build more ways for people to interact on top of messages, "including conversations, video calls, groups, stories, businesses, payments, commerce, and finally a platform for many other types of private services. "
Nevertheless, it is unclear whether Mr. Zuckerberg can pull off all of these features with Facebook. At WeChat, these services are supported by our mobile payment system, WeChat Pay. Because payments are already linked to the messaging service, people can easily order meal deliveries, book hotels, shotgun drives and pay their bills. WeChat Pay itself has 900 million monthly active users.
People also use WeChat Pay to transfer money and buy personal finance products. More than 100 million customers have bought WeChat's personal finance products, which managed over 500 billion yuan, or $ 74 billion, at the end of September last year, Tencent said. The users can buy everything from bonds and insurance to money market funds through the app.
Facebook lacks such a payment system. To be more like WeChat, the Silicon Valley company may have to purchase banking and payment licenses in many countries. A sign that Facebook has been thinking about payouts is working on a new crypto coin that is meant to let people send money to contacts in their messaging systems.
To make Facebook a private messaging product, Mr. Zuckerberg can have much more to learn from Allen Zhang, the creator of WeChat. Mr. Zhang is known for his perfectionist pursuit of a well-functioning service.
He is known in China's technological scene as an artist and philosopher, as well as for his violent missions against anything that detracts from the user experience, "Connie Chan, an investor at venture capitalist Andreessen Horowitz, recently wrote about Mr. Zhang.
Mr. Zhang struggled for many internal games when Tencent's revenue department pushed to put more ads on WeChat, in a speech of four hours earlier this year, he thought about the question of why there were no more ads on the messaging service, especially the opening page ads that are the norm in many other Chinese
Mr. Zhang's answer: Many Chinese people spent a lot of time – about a third of their online time – on WeChat, he said. "If WeChat was a person, it had to be your best friend so you would be willing to spend so much time with it, "he said." How could I post an ad on the face of your best friend? Every time you see it, you need to see an ad before you can talk to it. "
Mr. Zhang, who has held on to his product philosophy, has been fortunate because Tencent makes the bulk of the money from online games so it does not have to sell ads for revenue.
Tencent does not break its revenue from WeChat, but its third-quarter financial report 2018 said that social advertising revenues, which include WeChat, grew 61 percent from the previous year, while the "other businesses" category, which includes payment services, rose 69 percent.
Mr. Zuckerberg does not have that luxury , as he tries to switch from one ad-based business to another model, it will be far from an easy task to pull off.
"Zuck is obviously trying to address Facebook's privacy and fake news issues, but it will greatly affect their earning ability, "said Ivy Li, a venture capitalist at Seven Seas Partners in Menlo Park, California." How extensive the operation will be, and whether the implementation will be twisted by all ags compromises are a big question. "
She added:" Facebook is trying to strike a balance between a public square and a private space in an ever-polarizing society. The final result may be that it will be abandoned by both. "