David Marcus, head of Messenger, issued a statement on Tuesday advising a group will be set up to explore how to use blockchain across Facebook.
Even social media mammoths like Facebook (NASDAQ:FB) can’t seem to ignore blockchain’s potential.
On Tuesday (May 8), David Marcus, head of Facebook Messenger, issued a statement on the social media platform advising of his intentions to explore the use of blockchain across Facebook.
Marcus has been leading the Messenger team for four years, but joined cryptocurrency exchange Coinbase’s board of directors in December 2017.
“After nearly four unbelievably rewarding years leading Messenger, I have decided it was time for me to take on a new challenge,” Marcus said in his post on Tuesday. “I’m setting up a small group to explore how to best leverage Blockchain across Facebook, starting from scratch.”
While there were no additional details on what, exactly, this blockchain project will be, Facebook CEO Mark Zuckerberg said in his 2018 mission statement in January that he was interested in looking further into decentralized technologies, including cryptocurrencies.
“[Cryptocurrencies] come with the risk of being harder to control. I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services,” Zuckerberg said.
It wasn’t long, however, until Facebook announced its plans to ban all cryptocurrency-related advertisements, stating “there are many companies who are advertising binary options, ICOs and cryptocurrencies that are not currently operating in good faith.”
“This policy is intentionally broad while we work to better detect deceptive and misleading advertising practices, and enforcement will begin to ramp up across our platforms including Facebook, Audience Network and Instagram,” Facebook said. “We will revisit this policy and how we enforce it as our signals improve.”
According to U.S. News, Facebook’s venture into blockchain won’t have a significant impact on its future financial results. The outlet reported that Bank of America analyst Justin post advised that Facebook investors that think the social media company has a “major long-term opportunity” in the payments sector don’t have anything to worry about in terms of buying Facebook shares at its current price.
“Driven by user growth, new product offerings, and new ad formats, we expect Facebook to gain share in advertising markets and grow close to 30 percent over the next two years, which warrants a premium [price-earnings] valuation and in-line [price-earnings-to-growth] valuation versus its Internet peers,” Post was quoted saying.
Ever since Marcus’ post on Tuesday, shares of Facebook have increased 1.73 percent to reach $182.01 as of 2:08 p.m. EST on Wednesday (May 9). Based on 32 analyst ratings from Tip Ranks, Facebook currently has a “Strong Buy” rating with an average price target of$220.59, with a high estimate of $275 and a low of $138.
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Securities Disclosure: I, Jocelyn Aspa, hold no direct investment interest in any company mentioned in this article.