Facebook is replacing some of Instagram's tech to improve privacy. Here's why it will also super-size the app's money-making potential. (FB)

adam mosseri instagram

  • It looks like Instagram
    is gearing up to bring a major new revenue stream
    online.
  • The Facebook-owned
    app’s messaging service, Instagram DMs, is being reengineered with
    the tech that underpins Facebook Messenger.
  • In theory, this means Instagram will be well-positioned
    to roll out myriad tried-and-tested revenue generating features
    such as chatbot ads.
  • A Facebook spokesperson declined to comment on whether
    the company is planning this.

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Instagram looks to be setting the stage for a major new
cash-printing machine.

This week,
Bloomberg broke the news that Instagram’s messaging service, Direct
Messages (abbreviated as DMs), is undergoing a major
restructuring
. The entire product is being rebuilt using the
same tech that underpins Messenger, one of Facebook’s other
messaging apps. 

It’s all part of an ambitious reengineering of Facebook’s
multiple messaging products — Instagram DMs, Messenger, and
WhatsApp — that will allow them all to communicate with each
other seamlessly, as well as adding end-to-end encryption. 

Facebook is describing the move as part of its “pivot to
privacy” —a strategic shift aimed at safeguarding users’ privacy
after years of constant scandals. Skeptics argue it’s a way to try
and make it harder to break the company up under antitrust law if
the company’s critics arguing that Facebook is an anticompetitive
monopoly.

That may be true.

But the move has another likely consequence: It will help
Instagram make a ton more money.

A ‘Swiss-Army knife’ messaging app

Over the years, Facebook has built Messenger into an
impressively multi-functional messaging app that lets users do
everything from play games with friends to receive receipts for
their online shopping. Accordingly, it’s stuffed full of
monetization opportunities for the company, with ad units and
sophisticated integrations for brands looking to interact directly
with potential customers. 

Instagram DMs, in contrast, are much more straightforward —
they’re basically just a standard messaging service. 

Bloomberg reported that the basic look of Instagram DMs “won’t
change much” post-reengineering. But by integrating Messenger’s
tech under the hood, Facebook is putting in place a foundation that
can accommodate new brand-centric, money-making product features.
Chatbot capabilities for example, which are currently available in
Facebook Messenger but not in Instagram, allow users to interact
with retailers and other businesses through automated chatbots.
That’s a potential for revenue, through things such as paid chatbot
ads, that Instagram doesn’t currently have. 

A spokesperson for Facebook declined to comment on whether the
company was considering this when contacted by Business Insider.
But as a strategic move, it makes sense; it would allow Facebook to
implement tried-and-tested money making opportunities in Instagram
— producing new revenue streams without having to build anything
from scratch, and leveraging the Messenger team’s existing
knowledge on what works.

Ultimately, Facebook’s goal is likely for its messaging apps to
look a lot more like China’s
WeChat
— an all-in-one messaging app from which users can do
everything from ordering food to paying utility bills.  

Instagram is already a cash-printing machine, with an estimated
value of over $100 billion, and with a brand that has managed to
stay largely free of its parent company’s scandals. But this change
illustrates that when it comes to monetizing the app, there are
still plenty of opportunities that have still yet to be
tapped. 

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Facebook is replacing some of Instagram's tech to improve privacy. Here's why it will also super-size the app's money-making potential. (FB)