Facebook (FB) is carrying out trials on a new feature that allows people to search businesses within WhatsApp’s messaging service. Reuters reports that tests on the new search function have started in Sao Paulo, Brazil, allowing people to find shops and services through a directory in the app. FB shares fell 0.23% to close at $373.06 on September 16.
Facebook is a U.S. technology company that develops products that help people connect through mobile devices and personal computers.
The trials in Brazil will include thousands of businesses across various categories such as food, retail, and local services in certain Sao Paulo neighborhoods. Facebook will not store any search data as part of the trials.
Trials on the business search function mark an important milestone in Facebook’s push to bolster e-commerce on WhatsApp. In a bid to take advantage of the booming online retail trend amid the pandemic, Facebook has sought to open up WhatsApp to businesses. (See Facebook stock charts on TipRanks)
In the recent past, it has courted businesses, with a specialized app for small firms. It has also offered an API or software interface that allows larger businesses to connect their systems and strengthen their revenue streams.
In June, Facebook CEO Mark Zuckerberg confirmed Facebook’s Shops would expand to WhatsApp in several countries. The launch of shopping tools like product catalogs and shopping carts has also underscored a push to monetize the messaging app.
While Facebook has refrained from introducing advertisements on WhatsApp, Vice President of Business Messaging Matt Idema is not ruling out anything.
Idema stated, “There’s definitely a route on ads, which is Facebook’s core business model, that over the long term I think in some form or another will be part of the business model for WhatsApp.”
Recently, Goldman Sachs analyst Eric Sheridan reiterated a Buy rating on Facebook with a $455 price target, implying 21.96% upside potential to current levels. According to the analyst, Facebook is an industry leader in the social media space, and its edge on mobile computing will not recede anytime soon.
Consensus among analysts is a Strong Buy based on 24 Buys, 4 Holds, and 1 Sell. The average Facebook price target of $421.32 implies a 12.94% upside potential to current levels.
FB scores a “Perfect 10” on TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.