The Facebook Inc. application is seen in the App Store on an Apple Inc. iPhone in Washington, D.C., U.S. (Photographer: Andrew Harrer/Bloomberg)

Facebook Merging Apps Could Bolster Ads, Defense Against Breakup

(Bloomberg) -- Facebook Inc. Chief Executive Officer Mark Zuckerberg is planning to integrate the chat tools on the WhatsApp, Instagram and Facebook Messenger services, a move that could help the social media giant better tailor ads for users, and bolster its case against a breakup by regulators.

Zuckerberg’s plans, reported earlier by the New York Times, would involve stitching together the three apps’ messaging products behind the scenes, though consumers would still interact with each service separately. Facebook says the move would also enhance users’ privacy by introducing encryption to protect the messages from being viewed by anyone except those involved in the conversation.

“People want messaging to be fast, simple, reliable and private,” Facebook said in a statement. “We’re working on making more of our messaging products end-to-end encrypted and considering ways to make it easier to reach friends and family across networks. As you would expect, there is a lot of discussion and debate as we begin the long process of figuring out all the details of how this will work.”

Facebook Merging Apps Could Bolster Ads, Defense Against Breakup

The move isn’t something that Facebook’s more than 2 billion users have been asking for. Stitching the apps together may increase data-sharing among the properties, helping Facebook identify users across the platform, and improve the ability to target ads to them.

WhatsApp currently allows a person to create an account simply with a phone number, while Instagram allows people to have multiple anonymous accounts without using their real names. Zuckerberg’s vision centers around a service based on real identity.

WhatsApp, which Facebook bought in 2014 for $19 billion, and Instagram, which was purchased in 2012 for $715 million, had been operated relatively independently within Facebook until they grew to become more important parts of Facebook’s business. Tensions around Zuckerberg’s pushes for integration and control led to the departures of founders of both services in the last year, people familiar with the matter have said. Last year, Zuckerberg started calling his portfolio a “family of apps.”

Another potential argument for bringing the three units more firmly into the parental fold is the threat of a regulatory breakup of Facebook. Progressive groups have been urging the Federal Trade Commission for months to carve up Facebook and split off Instagram, WhatsApp and Messenger into their own companies. That would be harder to accomplish if the services are more tightly entwined. At the same time, it may increase concerns about transparency for consumers around how Facebook’s data gathering works.

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