Why Slack should be afraid of the day Facebook lost 120 billion in value
On 27 July, in what was one of the worst days in their financial history, Facebook did something right. Besides experiencing a market cap loss of $120bn, they also reported the acquisition of an Israeli email messaging start-up with email at its heart, Redkix.
While the messaging battle might have been won by Slack according to recent reports last week, the communication war has been given a new lease of life by this latest acquisition by Facebook.
It put Facebook firmly, and surprisingly, in the ‘email is back’ camp.
The deal confirms what millions of office workers already know, email is the primary communication platform relied on for business. It’s where deals get done and decisions are made. Not to mention the expected reach of over 3.8 billion users by the end of the year.
Email might not be as sexy as chat platforms like Slack, it can be clunky and a chore to use. Slack on the other hand fosters quick chat and quick decisions — yet its users are limited. Email might not be our first choice but it’s what we know and tech history shows it’s not always the coolest innovation that wins, but the innovation that lets us retain the information built through years of work.
Time and time again it’s the open standards that have an edge when in direct battle with proprietary standards. Steve Jobs, the proprietary guru, knew he had to build an amazing phone experience on top of the largest existing installed base of phone users (GSM). What would have happened if the iPhone, despite its definite appeal, was built on a network much smaller in reach? Or even worse, Jobs had decided to build his own hardware infrastructure instead of opting for the GSM standard!
The same could also be said for the now defunct Betamax video standard which Sony tried to build using their own reach. They failed to consider the migration issues of an installed VHS base that made the underwhelming yet widely adopted standard the overall winner.
While Slack has become the dominant tool for workplace messaging — boasting more active users than Microsoft’s competing Teams product — it still pales in comparison to the reach of email. As Slack continues to build reach through organic acquisition into their proprietary network, successful workers are now just having to reside across two communication camps.
The former is modern but with limited reach of around 10 million users. Email on the other hand has over 3 billion users and is the biggest network both in terms of reach and daily traffic but in its traditional form, is too clunky and slow for modern working life.
But there is another way.
In the world of communication evolution, we have two camps. The pure messaging camp, clearly dominated by Slack and the email revolution camp dominated by Front… and as of Friday and a cool $100 million spend, Facebook. And with that, it seems to be becoming even less likely that our online address book where we identify people by their email — will be entirely replaced with a channel name hosted by Slack.
I believe that the day Facebook lost 120 billion in value will be remembered as the day the future of business communications was redefined. As of that day, the email camp is stronger than ever: Facebook, Front, Spark (and Loop).