Perhaps it was mere coincidence that two senior Facebook (NASDAQ:FB) executives resigned from the company recently in the wake of CEO Mark Zuckerberg’s announcement that the company would be placing its future bets on private encrypted, ephemeral communications. Do the departing executives know something we don’t?
By seeking to establish a private messaging and payment services platform, Facebook clearly wants to emulate the success and popularity of China’s WeChat messaging service. The difficulties the company would face in implementing such a private communication platform are pronounced and may prove to be insuperable.
First, even if the company is successful in diversifying or expanding its platform to partner with financial services firms for a payment system through the Facebook private messaging platform, the revenue generated from this new business operation is going to be a pittance compared to the Niagara Falls-type of cash flow the company generates from selling its users private data to advertisers. Nothing Facebook pulls out of its hat is going to surpass or equal this money-making Leviathan. Ever.
Second, Tencent’s WeChat app was developed and flourished in an