What Does Facebook's Workplace Software Mean?

Facebook Inc FB announced the launch of Workplace, marking its first major foray into the enterprise software market.

While saying that estimating the Workplace potential was difficult, it could represent “a several hundred million dollar incremental revenue opportunity,” Citi’s Mark May said in a report. He maintained a Buy rating on the company, with a price target of $158.

May noted that Workplace represented “another potentially large revenue stream” outside of Facebook’s core advertising business, while adding that it could potentially generate more than $1 billion in incremental revenues for the company.

Related Link: 3 Takeaways From Facebook's Oculus Connect Event

Differentiated From Competition

“Facebook’s brand reputation, its history of providing secure communications, and most importantly, its intuitive and well-known user interface” would enable the company to differentiate Workplace from the products being offered by its main competitors, May stated. He mentioned the main competitors as Yammer by Microsoft Corporation MSFT, Chatter by salesforce.com, inc. CRM, Slack and Jive

Important Takeaway

The analyst believes that among the most important takeaways is that Workplace is “a reminder that the company has numerous opportunities to leverage its global brand, installed user base and its strengths in application development to expand its opportunities beyond the ‘big blue app’ (e.g., Messenger, Video, Groups, Marketplace, Events, etc.).”

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