Facebook Inc. (FB) Seeks to Subsidize Messenger in Emerging Markets

Facebook Inc. (NASDAQ:FB) has been working on mobile to move itself into a new phase where the social network can follow its billion users wherever they go. And now, with technology advancing to the point that many carriers are putting forth robust but expensive data plans, there are several mobile apps that help users reduce their data usage by providing cheap or free text messaging and video chat. Now, Facebook is taking a step toward getting a foothold in emerging markets by providing its version of cheap or free messaging – via subsidies.

Hedge funds, on the whole, were very bullish on Facebook last quarter. The total size of the funds we track who were invested in the company grew by nearly 40% from Q3; that’s a huge spike (see why it’s always important to pay attention to the smart money).

Facebook Inc. (NASDAQ:FB) announced that over the next several months, it will be rolling out a subsidy program with 18 wireless carriers around the world, in which Facebook would underwrite some or all of the data fees that would be imposed on customers who use the Facebook Messenger service for texting, video chat and instant messaging. The subsidy would be available for users of the Facebook Messenger app on iOS by Apple Inc. (NASDAQ:AAPL), Android by Google Inc. (NASDAQ:GOOG) as well as Facebook for Every Phone.

Facebook LogoFacebook Inc. (NASDAQ:FB) has been upgrading its Messenger app to enhance the experience with voice messaging, voice chat and video-chat capabilities to go along with the instant messaging and texting. All of those together will hike up a user’s data and bandwidth usage, so Facebook is reaching out to emerging markets like Portugal, Ireland, the Philippines, Italy, Saudi Arabia, Brazil, Egypt and Indonesia, among others. With the wireless carriers, Facebook is offering to provide subsidies to users to offset some or all of their costs for using Facebook Messenger only as their only or primary messaging service.

What do you think about this service? How much of an effect do you think this will make on Facebook Inc. (NASDAQ:FB) and its market share in these emerging markets? Will Facebook gain an upper hand in these markets over some competitors? Let us know your thoughts in the comments section below.

DISCLOSURE: I own no positions in any stock mentioned.

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