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Facebook (FB) Begins Merging Chats From Instagram, Messenger

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Facebook has started integrating Instagram and Messenger chats in a fresh bid to allow cross-messaging among its family of apps, according to a report in The Verge. It will allow users to access the inboxes of both Messenger and Instagram Messages at the same time.

The update is for both iOS and Android devices. Currently, the functionality to message Facebook users from Instagram is not activated.

The update comes with the message “There’s a New Way to Message on Instagram” and replaces the regular direct message icon in the top right of Instagram with the Facebook Messenger logo.

Once updated, the Instagram app will be able to embed Messenger functionality, and add a colorful messaging screen, more emojis and features such as swipe-to-reply and the ability to chat with friends who use Facebook.

Facebook’s Interoperability Initiatives Across Services

Instagram and Messenger chat merger could be the latest step in Facebook’s efforts to bring individual products and apps closer together. In the past two years, it has re-branded Instagram and WhatsApp to increase users’ awareness that the apps are owned by Facebook.

Moreover, in another step to integrate its family of apps, the social-media giant confirmed integrating Messenger Rooms shortcut on both Instagram and WhatsApp. Users can now access Messenger Rooms, which allow group video calls of up to 50 people with no time limit via WhatsApp on the desktop.

Facebook’s goal is to allow its users to use any of the three apps (WhatsApp, Instagram, and Messenger) to reach anyone on their contact list, without having to register for all three services.

The move appears to be among Facebook’s plan of unifying all its services to create a privacy-focused communications platform. The company is focused on initiatives like private group chats and person-to-person communications instead of the news feed style of public broadcast Facebook is known for.

Moreover, Facebook aims to operate the three services on the same infrastructure in order to have a cross-platform chat service with end-to-end encryption. Notably, The Federal Trade Commission keeps a tab on Facebook’s policies concerning how it integrates its apps or allows them to work with potential rivals.

Facebook’s Efforts to Keep Competition at Bay

Facebook’s initiatives toward data protection and privacy issues are expected to attract old and new users and help it compete with rivals like Apple’s (AAPL - Free Report) iMessage.

Notably, Apple’s iMessage, the leading messaging app in the United States, is already an end-to-end encrypted service. Moreover, multiple messaging apps such as Telegram (with more than 200 million monthly active users), Signal and Wire among others have been able to increase the size of their user base by promising full end-to-end encryption and greater user privacy on their platforms.

Nevertheless, a common Facebook account linkage across service apps will provide Facebook with consolidated user information from all platforms.

Moreover, the company’s user base of more than 3.14 billion (including its Family of services — Instagram, WhatsApp and Messenger) presents a large canvas for advertisers and makes the platform highly attractive.

Zacks Rank & Stocks to Consider

Currently, Facebook carries a Zacks Rank #3 (Hold).

A couple of better-ranked stocks in the broader Computer & Technology sector are Dropbox, Inc. (DBX - Free Report) and Etsy, Inc. (ETSY - Free Report) , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth for Dropbox and Etsy is currently pegged at 34.4% and 26.5%, respectively.

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