Recently, we had multiple discussions with three large Hedge Funds Clients on this topic in last three weeks. Here is the summary of these discussions.
If you ask your teen nephew or niece about Facebook, they will mostly say they are not using it! Even though Facebook has declined in popularity among younger people, the platform is far from dead. But, In 2023, Meta’s product aren't just social networks; they're the founding base for an AI revolution.
In our previous post, we talked briefly about Meta and Amazon have teamed up to bring you a cool new feature in which users can connect their Facebook and Instagram accounts with Amazon. As part of these client discussions, we delved into understanding Meta's product family, which includes Facebook, Instagram, and WhatsApp, and their AI bots - Consumer and Business. In this article, we will share those insights and cover:
Meta Consumer AI Penetration is ~3%
A Glimpse into Client Discussions: Predicting the Influence of AI on Facebook Search Categories
Our Prediction: Unified Platform for Creating Business AI Chatbots
Is Meta Undervalued?
Meta Consumer AI Penetration is ~3%
Before we look at Meta AI, Let’s first quickly look at some stats across Facebook, Insta and WhatsApp.
Facebook, the largest social media platform globally, boasts 3+ billion monthly active users. In the US alone, 180+ million people use Facebook, making up a significant portion of the country's smartphone users.
Instagram is a powerhouse in social media, with staggering statistics highlighting its impact. With over 2 billion active users and daily interactions in the millions.
American adults spend an average of 30.6 minutes daily on the app.
Instagram ranks as the 2nd most downloaded app worldwide.
50.6% of Instagram users identify as male, while the remaining 49.4% are females.
India takes the lead with a staggering minimum of 326.6 million active Instagram users.
Back in 2014, Facebook clearly saw WhatsApp as a potential threat to its own offering, and therefore it acquired WhatsApp for $19 billion, which remains its largest acquisition to date and one of the largest tech acquisitions in history.
Now fast forward to 2023.
According to some analysts, each WhatsApp user is worth $44.
Therefore, considering the current WhatsApp user base of more than 2.7 billion, WhatsApp valuation is estimated to be more than 118.8 billion in 2023.
Now, let’s look at Meta AI. Meta released its conversational assistant available on WhatsApp, Messenger, and Instagram. It can provide real-time information, generate photorealistic images from text prompts, and is powered by a custom model leveraging technology from Llama 2 and Meta's latest large language model research. It has access to real-time information through a search partnership with Bing and offers image generation tools.
Now, the key question is, given this current DAU and what percentage of app DAUs use Meta AI chatbot function respectively on each platform?
We think that the Meta AI penetration is about 3% of DAU.
Although it's still too early to make a final judgment on their performance, it must be noted that the celebrity chatbots introduced by Meta haven't achieved the level of greatness we initially anticipated. The early indications suggest that there might be room for improvement in terms of user engagement, functionality, or other aspects of these chatbot experiences. It's important to remember that the development and optimization of chatbots is an ongoing process, and as they continue to evolve, we may see enhancements that address some of the initial shortcomings. Ultimately, the true measure of their success will be determined by how well they meet user needs and expectations over time.
Here is what users are saying:
A Glimpse into Client Discussions: Predicting the Influence of AI on Facebook Search Categories
Let's pause for a moment and take a broader view of Facebook Search.
When you consider the reasons you use Facebook, the answers typically fall into the following categories. We anticipate that E-Commerce, Entertainment, and Information search will continue to see the highest impact.
Informational, E-Commerce and Entertainment are the major Search buckets in User Search. The E-Commerce category, comprising product searches, price comparisons, and brand research, is expected to flourish further as users increasingly turn to Facebook for shopping and discovering new products. Similarly, the Entertainment sector, with its vast array of content including videos, music, movies, and games, continues to engage a significant portion of the user base, offering both leisure and information. Moreover, the Information search category, encompassing news, factual data, and educational content, remains a crucial aspect, especially with Facebook being a primary news source for many users.
These three categories — E-Commerce, Entertainment, and Information search — are poised to be significantly influenced by AI chatbots and similar AI-driven technologies.
Our Prediction: Unified Platform for Creating Business AI Chatbots
