I happened to read an article from August that discussed the fact that Zoom Video’s (NASDAQ:ZOOM) stock fell because Facebook’s (NASDAQ:FB) Workplace business communications platform had introduced video tools.
Facebook is a giant company, so I’m not sure how many owners of FB stock actually noticed. However, the news made me think about the efforts to break up Big Tech and what that might mean for FB stock.
I actually wrote about this very subject in March, suggesting that Elizabeth Warren is right to want to break up the big tech stocks.
“Innovation only thrives when small businesses can grow into big companies. Warren believes this isn’t happening as a result of big tech stocks,” I stated.
I finished by suggesting that investors should embrace the idea of a tech breakup. After all, Standard Oil was broken up in 1911 and it spawned three very large oil companies that still exist today, I pointed out.
Workplace Has 3 Million Users
At Workplace’s annual conference on Oct, 8, FB announced that Workplace had reached 3 million paying users. The website hit that figure in just three years. Even more remarkable, 1 million of those users were acquired since February, meaning that Workplace has an annualized growth rate of 67%.
Workplace charges $4 or $8 per worker per month.
If 50% of the users generate $8 per month and 50% generate $4, Workplace’s annual revenue would be over $200 million.
Now, for a business with revenue of $62.6 billion over the past 12 months, $200 million+ is more like a rounding error than a real business.
Separate From Facebook
The beauty of Workplace is that it’s completely separate from Facebook. The parent company doesn’t have access to its corporate data.
“The uniqueness of Workplace is that we built the business by starting first with big companies,” Julien Codorniou, vice president of Workplace said in March. “As Workplace continues to grow, the next priority is to increase adoption among smaller and mid-sized businesses, too.”
As Facebook continues to add third-party apps to Workplace ( it added 50 in 2018 including Microsoft’s (NASDAQ:MSFT) Sharepoint), the website will continue to attract businesses of all sizes.
More importantly, Workplace focuses on frontline employees while Slack and Microsoft Teams are primarily targeting white-collar knowledge workers. As Workplace looks to attract more small- and medium-sized businesses, service-oriented companies with large labor pools should be drawn to Workplace.
The Bottom Line on FB Stock
As another InvestorPlace columnist, Tezcan Gecgil, recently highlighted, FB stock has gone sideways over the past 20 months as its reputation has taken a hit over privacy concerns.
As various stakeholders call for the breakup of big tech, I know which part of Facebook I’d send out the door first.
Spinning off Workplace would be a natural move for FB. The only problem is that the IPO market is in the gutter at the moment.
Maybe sometime in 2020?
At the time of this writing Will Ashworth did not hold a position in any of the aforementioned securities.