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Facebook Shifting Tactics as the Fight for Ad Revenue Intensifies

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Nov. 20 2020, Updated 12:40 p.m. ET

Workplace by Facebook

The fight for digital advertising revenue has recently intensified, and Facebook (FB) appears to have found a way to keep its top line growing despite the pressure. Workplace by Facebook, the company’s corporate communications tool, isn’t a new concept, although it was introduced on October 10, 2016. This collaboration tool can be compared to the enterprise chat services offered by Slack, Microsoft (MSFT), and Jive Software (JIVE).

However, Facebook’s move to a paid subscription service opens a new world of revenue for the social media giant. This development could calm investors who had started worrying about stiff competition for ad revenue crimping the company’s revenues and profits.

Workplace by Facebook was originally tested as Facebook at Work. The tool supports a broad range of functions intended to facilitate corporate communications.

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Supported functions

Workplace by Facebook supports the creation of groups, as well as chats among employees from different companies. Employees using Workplace by Facebook can also exchange documents hosted on Box’s cloud platform. Workplace by Facebook has multimedia support, which allows users to share text, images, and videos.

Workplace by Facebook charges

Facebook (FB) has priced Workplace by Facebook between $1–$3 per user per month, depending on the size of the subscription purchased. The pricing model is such that the higher the number of accounts, the lower the cost of using the tool.

Pricing for Workplace by Facebook appears to be competitive compared to rival services. For instance, while Slack has a free version of its enterprise messaging service, a premium package costs between $6.67–$12.50 per user per month. Slack has integrated its enterprise messaging service with Watson from IBM (IBM).

Telenor (TELNY), which has ~35,000 employees, is one of the companies that has tried Workplace by Facebook.

In addition to opening a new revenue stream for Facebook (FB), Workplace by Facebook also bolsters the company’s efforts to break its reliance on advertising income. However, as a newcomer to the enterprise messaging market, Facebook will have to fight hard for its position in that space.

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