How Microsoft Corporation (MSFT) Will Ride Facebook Inc (FB) to the Top


Microsoft Corporation (MSFT) had a rough start with bots earlier this year when it released one into the wild that Twitter Inc (TWTR) users quickly taught to become racist. But it’s making up for it with some interesting tools that allow developers to create bots for all sorts of messaging apps including SMS.

How Microsoft Corporation (MSFT) Will Ride Facebook Inc (FB) to the Top

The most recent messaging app that Microsoft’s Bot Framework supports is Facebook Inc‘s (FB) Messenger, and its 900 million monthly active users.

Facebook bots made a big splash in April when FB unveiled its Messenger Platform. The company sees it as a path toward monetizing Messenger by generating more organic interactions between businesses and users on the platform. MSFT is jumping on board, as it looks to even the disparity in apps between Windows and Android and iOS.

MSFT Is Getting Millions of New Users Through FB

One of the first Microsoft bots is a Cortana bot the company made for Skype, which helps users identify the people and places in conversation. It can also add things to users’ calendars and book travel accommodations.

With the expansion of the Microsoft Bot Framework to FB Messenger, hundreds of millions of people suddenly have access to Microsoft’s services.

Moreover, Microsoft should be able to attract developers interested in creating Facebook bots since it’s able to deploy a single bot across multiple platforms unlike Facebook’s SDK. And that’s good for Microsoft.

Not only does Microsoft develop closer relationships with developers, it’s able to acquire a portfolio of bots for its own messaging properties, Skype and Yammer — a part of Office 365.

Microsoft has been pushing to bring more engineers to its software development products with support for multiple platforms. It recently acquired Xamarin, which allows developers to create a core back-end codebase that’s functional across iOS, Android, OS X and Windows. It bundled Xamarin’s tools with its Visual Studio and offers them for free to individual developers.

The biggest thing holding back Windows on mobile devices is its lack of apps relative to iOS and Android. Even the apps that it does have are often lacking compared to their iOS and Android counterparts.

Creating bots, especially on a universal platform such as FB Messenger, could help bring the same level of functionality to Windows phones and tablets as iOS and Android devices.

Microsoft CEO Satya Nadella believes bots are the new apps. Instead of downloading a bunch of different apps for day-to-day activities, we’ll have a few favorite apps, and interact with bots for the rest of the tasks we want to accomplish on our smartphones. Those bots can be on any one of many messaging apps, including plain-old text messaging.

If bots really do become the new apps, solving everyday problems, Microsoft will have evened the software gap between itself and its competitors on mobile. At that point, hardware will become a more distinguishing feature, and Microsoft will have already made some big strides on that side of coin, given its recent release of the Surface Pro 3 and Surface Book.

It certainly faces tough competition from Apple Inc. (AAPL), Samsung (SSNLF) and HTC, among others, but without software limitations holding it back, it’ll be an easier road ahead for MSFT.

That’s why the company is working to expand bots to as many platforms as possible. With Facebook Messenger’s 900 million monthly active users and a recent focus by the app itself on bots, Microsoft is striking while the iron’s hot. I

However, whether Mr. Nadella’s sentiment that bots are the new apps is actually true remains to be seen.

As of this writing, Adam Levy was long Apple. He does not hold any securities in any of the other aforementioned securities.

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