When Facebook CEO Mark Zuckerberg released a 3,200-word memo last week outlining a vision he said he had for privacy and messaging, industry analysts who follow the company closely weren't particularly surprised.
Weeks earlier, on Jan. 30, Zuckerberg said many of the same things on a conference call with Wall Street analysts after the company reported quarterly results.
"Arguably, the most important things were already on the call," said Brian Wieser, the global president for business intelligence at the media-buying firm GroupM. What Zuckerberg did in the memo, he said, was to put those thoughts under the heading of a "vision."
The lack of surprise was reflected in Facebook's stock, which has barely budged since last week's announcement.
Zuckerberg's "vision" wasn't particularly new on the investor call either. Although he invoked some grand language, much of what his memo detailed has been part of the company's strategy for years: developing private messaging services such as WhatsApp, increasing the data sharing between Facebook's family of apps, and testing out ways of posting online that aren't permanent, like Instagram's stories feature, copied from Snapchat.
Even the idea of pivoting toward a pro-privacy position has been part of Zuckerberg's mantra since at least 2014.
For some analysts, Zuckerberg's most recent announcement boiled down more to continuity than to change: After a scandal-plagued year in which Facebook was the target of lawmakers and regulators around the world, the company's familiar CEO was offering reassurances that he could keep the company growing rapidly by building on its core products, rather than replacing them.
"There were quite a lot of people who took what he wrote as a change in business model for Facebook," said Carolina Milanesi, a tech industry analyst at Creative Strategies, a market research firm.
But, she said, "it's really hard to change the Facebook business model at this point."
Zuckerberg's manifesto should be read as advocating layering, not changing the model, analysts said. Consumers shouldn't expect a different Facebook — they should expect "more Facebook."
"We believe Facebook is heading into a heavier product cycle than we've seen over the past couple years," Doug Anmuth, an analyst for the investment bank J.P. Morgan, wrote in a note to clients a day after Zuckerberg's Jan. 30 call with analysts.
WhatsApp, which Facebook bought in 2014, has been testing out a payments system in India, processing about a million transactions a month, according to The Financial Times. Anmuth pointed to that project as well as end-to-end encryption and shopping on Instagram as examples of additions Facebook is working on.
Facebook on Wednesday did not immediately respond to a request to elaborate on its planning.
Analysts said they expected Facebook to test out lots of possible additions, with one possible model being WeChat, a smartphone app that's ubiquitous in China. Besides chat functions, WeChat includes a mobile payments system used for shopping, and it collects revenue by charging a commission. Facebook may roll out a cryptocurrency in the next year, The New York Times has reported.
A business model that's about internet commerce may become a bigger priority for Facebook if regulators crack down on the collection of personal data, the lifeblood of Facebook's ad business.
"It might come down to how stable the ad business is. If that starts to fall apart, maybe they push on the accelerator a little bit," said Chris Armbruster, a research analyst at investment firm Kayne Anderson Rudnick. The firm owns Facebook shares in one of its funds.
The challenge is partly about responding to the latest shift in consumer habits — in this case, a rebounding interest in individual and small-group messaging, rather than public social media posts. The shift echoes the biggest change in the use of Facebook since 2012, when the company moved from a service people used primarily on desktop computers to one they used on their mobile phones. Facebook's ad business took off following its shift to mobile.
Time is money
Like other ad-supported businesses, Facebook relies on its ability to keep people's attention, and if anything a boost to its offering in private messaging would help that, according to Ben Thompson, who writes an influential newsletter about the tech industry.
People are spending more time on private messaging whether Facebook wants them to or not, and "it is better for Facebook that it happen on their properties," Thompson, a former Apple and Microsoft employee, wrote in one analysis.
If it succeeds, Facebook preserves the ability to run ads on those services, using data from Facebook itself to help target the ads to specific people, and the company "prevents would-be competitors from capturing leverageable attention," he wrote.
Facebook reported $22 billion in profit for 2018, an increase of 39 percent from a year earlier. Some 99 percent of the company's revenue was from advertising, with small amounts coming from in-app gaming purchases and other sources.
Facebook is not guaranteed success in adding a new business to its operations. Unlike the shift to mobile, a payments-based messaging business is almost entirely new to the company.
Gary Bradshaw, a portfolio manager at Hodges Mutual Funds in Dallas, said that Zuckerberg risks "stubbing his toe" if he ventures too far away from the company's proven ads business.
"To get into payments or other sources, I don't know that they need to do that. It gets pretty daggum competitive out there," he said.
But Bradshaw, whose funds own Facebook shares, said the Facebook founder has a record of creating value for shareholders that may give him the benefit of the doubt. "I don't know how it's going to evolve, but I bet they figure it out in time," he said.
Wieser, of GroupM, said several long-term issues facing Facebook seem to be converging. The company is eager to generate revenue from WhatsApp, which Facebook paid $22 billion to acquire, while regulators in Germany and elsewhere are threatening to clamp down on how Facebook collects and uses data.
"These ideas, which may have been building over the prior four years, may have just come to a head," Wieser said.