Facebook has hired PayPal president David Marcus to run its messaging business, the company announced today. Marcus won’t oversee WhatsApp—Facebook’s potential $19 billion bet on mobile messaging—but will instead manage Facebook’s other messaging efforts. These include the standalone Facebook Messenger app, which is already one of the largest messaging services in the world, with some 200 million active users.
Marcus’s expertise in mobile payments—he came to PayPal when eBay bought his startup, Zong—should come in handy. While Facebook makes about 90% of its money from advertising, mobile messaging represents an opportunity to diversify into payments and commerce.
More than just chat apps, mobile messaging services are already becoming huge social activity hubs on smartphones. That level of engagement, combined with access to your address book—and eventually your bank account or credit card—could be the gateway to simple, frictionless mobile payments and commerce.
Japan’s LINE app already generates real money from social gaming and virtual sticker purchases, while China’s WeChat has launched payment services. Along these lines, email could also be another potential mobile payments interface: Square is already experimenting with this with Square Cash.
Facebook already has a modest payments business, generating more than $200 million in sales per quarter. But that business is flat, while Facebook’s ad revenue grows healthily. Mobile messaging could change that.
