Alphabet Inc’s (NASDAQ:GOOG, NASDAQ:GOOGL) chat platform Allo almost had the potential to prove disruptive to messenger services like iMessage from Apple Inc. (NASDAQ:AAPL) or Messenger from Facebook Inc (NASDAQ:FB).
Alas, it falls short.
On the flip side, nothing is forever, and consumers can be unpredictable. A tweak here and an adjustment there, and Allo could end up carving out some market share in what has become an amazingly crowded online-messenger space.
The question is: What tweaks and adjustments need to be made for Apple and Facebook to worry, and for Alphabet shareholders to view the technology as yet another reason to buy into Google’s dominance of the web?
Hello Allo
Allo was actually unveiled at Google’s I/O conference in May and created an immediate buzz. The mobile-only tool includes Google Assistant as part of the conversation, answering questions and making suggestions within the context of the chat. It’s not just powered by artificial intelligence, however. The Google Assistant actually learns each user’s nuances and preferences, and improves its usefulness to users as time passes.
Better yet, Allo also allows for end-to-end encryption, meaning they can’t be intercepted and interpreted by anyone other than the chat’s participants — and Google, unless the “incognito” mode is selected. In incognito mode, not even Google can decrypt messages, even if a subpoena or search warrant is presented.
The catch? Unless a user explicitly tells Allo to encrypt and delete all conversations (a feature called “self-destruct”), it won’t. But in the incognito mode necessary to make that happen, Google Assistant — the messaging platform’s distinguishing feature — doesn’t work.
For some, a lack of in-chat assistance is a small price to pay for complete privacy. For others, privacy isn’t as important as all the bells and whistles.
How Allo Stacks Up
Like all the other messaging platforms available, Allo has pros and cons. It’s going to struggle to break into the market, however, not so much because it’s not competitive, but because most users have already picked their platform.
To that end, Facebook is the clear name to take aim at. It owns the world’s most popular chat service, WhatsApp, which boasts 1 billion users, while Facebook Messenger — the world’s second most used platform — sports 900 million users.
There’s a reason for Facebook’s dominance in this aspect of the mobile market. Several reasons, actually.
- Facebook Messenger (along with iMessage) supports third-party features within the app. These include things like the ability to send money from one user to another within the chat window. Google has said it has no intention adding such capabilities to Allo.
- Facebook fans also love the fact that Messenger is device-agnostic, meaning it works the same on a computer as it does a Mac as it does any mobile device. Allo inexplicably isn’t available on a PC or Macintosh. Conversely, although it’s still less than elegant, the Google Assistant built into Allo will get better. For those who have already given up any hope of actual privacy on the web, it’s going to be a nice little add-in.
- Perhaps the biggest difference between Facebook’s Messenger (and WhatsApp) versus Allo — Facebook is blatantly monetizing its platforms, allowing advertisers to contact users. Google isn’t monetizing Allo, at least not directly. There’s little doubt the company is scouring non-incognito chat sessions, however, figuring out a way to present highly targeted ads on that mobile device.
Bottom Line
While Allo introduces some interesting ideas, it doesn’t bring any game-changers or deal-breakers to the table. The most distinguishing factor only works when users are willing to give up their privacy, and it’s worth noting Facebook offers its own messenger chat bots.
Unlike Google’s AI-based utility, though, client companies are responsible for developing their own chatbots that converse with users. Facebook is just the host.
With all of that being said, as interesting as Allo is, it’s not apt to get a great deal of traction.
Lack of utility isn’t holding it back; some users will love the privacy it offers. It’s simply the fact that Allo users can only send messages to other Allo users. It’s unlikely that anyone will be able to convince the majority of their acquaintances to switch gears after spending months if not years getting acquainted with a different service.
Being first really is more important than being best.
As of this writing, James Brumley did not hold a position in any of the aforementioned securities.
