Facebook Inc (FB) Workplace Is Ready to Disrupt

Advertisement

Facebook Inc (NASDAQ:FB) officially launched Workplace this week, a business-oriented version of its social networking site.

On the surface, FB moving into the enterprise space raises a few skeptical eyebrows. After all, this is the “fun” social network that has historically been a drag on employee productivity to the point where up to half of all managers banned the site on business computers to keep workers focused. People whose image of the company is stuck in 2008 see a fundamental contradiction.

But when you take a closer look at CEO Mark Zuckerberg’s end game, it seems to make sense.

FB Stock’s Goals for Facebook Workplace

The interns and entry-level graduates who grew up with Facebook never grew out of it: a stunning 88% of Millennials (adults age 18-34) maintain active Facebook accounts, spending more than 30 minutes a day scanning their feeds. They’re on the site anyway, so I can see why Zuckerberg wants to reach for the professional side of their lives, too.

The kinds of businesses FB is courting here aren’t your typical office setups. They’re more along the lines of big food service companies like Starbucks Corporation (NASDAQ:SBUX), global manufacturers and organizations where the data connection holding people together is likely a smartphone or tablet.

Facebook Workplace is a new concept, so if it works it’s a true opportunity to reach whole industries that aren’t already using productivity tools from Salesforce.com, Inc. (NYSE:CRM) or Microsoft Corporation (NASDAQ:MSFT).

Those companies that have invested heavily in email systems or top-down management tools can go on using the systems that work for them, so Workplace isn’t really a threat to what CRM and MSFT provide.

However, as critical mass within the labor force shifts down from the Baby Boomers, today’s disruptive innovation may become the status quo of how we work a decade or two from now. That’s what made Apple Inc. (NASDAQ:AAPL) a player in enterprise when thousands of executives fell in love with their iPhones and demanded that IT support their personal phones.

FB has actually already partnered up with MSFT, signing a deal to use some of its software in conjunction with the Workplace app. As long as Office 365 survives in some form, MSFT is happy.

Alphabet Inc (NASDAQ:GOOG, NASDAQ:GOOGL), on the other hand, may be on the defensive. Every document that gravitates toward MSFT and Box Inc (NYSE:BOX) through this platform is another missed opportunity for Google Docs. In the long term, Facebook Workplace is also a challenge to CRM and traditional enterprise project management software vendors like Oracle Corporation (NYSE:ORCL) or NetSuite Inc (NYSE:N) — though it’s still too early to tell how much of an impact Workplace will ultimately have.

There are now more Millennial workers than Baby Boomers, and more are coming to the labor force every day. The workplace itself has shifted away from the traditional office and project groups are now increasingly virtual, sharing tasks among people across the planet. FB hopes to unlock a new productivity revolution similar to what we saw a generation ago.

Whether that promise holds true or not, people willing to embrace the new “cloud labor paradigm” in the here and now are going to need tools to manage it.

Hilary Kramer is the editor of GameChangersBreakout Stocks Under $10High Octane Trader, Absolute Capital Return and Value Authority. She is an accomplished investment specialist and market strategist with more than 25 years of experience in portfolio management, equity research, trading, and risk management. She has extensive expertise in global financial management, asset allocation, investment banking and private equity ventures, and is regularly sought after to provide her analysis on Bloomberg, CNBC, Fox Business Network and other media.

More From InvestorPlace


Article printed from InvestorPlace Media, https://investorplace.com/2016/10/facebook-inc-fb-stock-facebook-workplace/.

©2024 InvestorPlace Media, LLC