Facebook Inc (NASDAQ: FB) stock closed at higher yesterday than the day before and is up today as well. It happened as the social networking giant introduced a new feature to its Instagram platform. The new feature called Reels allows users to create short video clips with effects. The feature is seen to contend and compete with Chinese video startup TikTok.
At the time of filing this report, Facebook (FB) stock price is $272.18 (+2.60%).
Facebook (FB) stock price has been rising these days. It has followed the general market pattern where technology stocks are going up with no signs of retreat. A general correction of this trend is coming. For now, there is no end in sight for the bulls.
Facebook (FB) Stock Is Up as Bytedance Faces Pressure from U.S. Government
Instagram Reels is coming at a time when TikTok and its parent company ByteDance are facing pressure from the United States government. U.S. President Donald Trump had recently reportedly indicated that he would shut ban the video platform. India had already done so. Microsoft Corporation (NASDAQ: MSFT) is in comprehensive talks on acquiring TikTok.
The technology company has been looking for a way to get its share of the social media pie. This acquisition could be it. On the other hand, if Reels and other competitors like it succeed, the acquisition my turn out to be a loss for the software giant.
Instagram Reels was launched in Brazil in November 2018. It was called “Cenas” at the time. The product was released as a test to observe user’s reactions regarding this new form of video content.
It appears to have been successful as Facebook has launched the feature in the U.S. and seemingly in other countries as well. It also points to the social media giant’s competitive spirit. Something that the regulators at the European Union and U.S. congress are fighting.
Anti-Trust vs Big Tech
In the larger picture, Facebook and other technology giants have caught the attention of the anti-trust movement. Things have been choppy between big tech and these guys. The main argument is that the big technology companies have become anti-competitive. Big tech usually comes up with ways and means to stifle the competition.
It may appear to be so on the surface. On the other hand, the big technology companies are competing against the little guy as well.
Facebook had launched Instagram stories in August 2016, and the Facebook version on March 28, 2017. The stories feature has been seen as an attempt to compete against social media startup Snapchat by Snap Inc (NYSE: SNAP). Facebook may have succeeded in reducing some of the influence of Snapchat.
Time will tell if these kinds of moves will work against TikTok. As the rest of the world keeps reeling from the COVID-19 pandemic, it seems like the fortunes of Facebook CEO Mark Zuckerberg grow larger. The Wizard of Menlo Park’s net worth crossed the $100 billion mark recently. It points to how profitable social networking can be.