In a movement that has become too familiar, Facebook (NASDAQ: FB) noticed an innovative social media app that is gaining traction and wants to take a bite out of small business growth. The dominant social media network has rolled out this guide countless times over the years, often trying to acquire a promising new startup while simultaneously threatening it by competing with copy.
The latest target is Cameo, an app that allows users to pay celebrities to deliver personalized messages.
Coming after Cameo
Bloomberg reports that Facebook is developing a new feature called Super, which closely resembles what Cameo is doing. Super will allow content creators or celebrities to host virtual events where the public can send tips or digital gifts. Viewers will also be able to pay for the privilege of appearing directly in the event’s live broadcast, according to the report.
Facebook’s New Product Experimentation (NPE) team is believed to be behind the development of the application. This division was created in the summer of 2019 with the explicit task of testing new ideas, and the team would be working on apps that essentially compete with everyone. The social media tech giant has made it clear that NPE is a riskier business and will not hesitate to shut down apps that fail to gain traction. Several apps have already been shut down, including Hobbi and Lasso, which were trying to replicate Pinterest and TikTok, respectively.
Founded in 2016, Cameo connects celebrities with fans, who can pay for personalized videos and messages. The celebrity sets the price, with the start-up slashing all transactions by 25%. Users can ask the celebrity to perform specific actions or say certain things, and clips – like a recent Cameo of UFC announcer Bruce Buffer breaking up with a user’s girlfriend – often go viral on social media.
– Cameo (@BookCameo) December 14, 2020
The company raised $ 50 million last summer in a Series B funding round at a valuation of $ 300, according to Axios. Cameo’s popularity has increased during the COVID-19 pandemic, as the platform is a way for people to virtually connect while staying at home. As a small private company, Cameo doesn’t regularly disclose many details about its business, but said it facilitates hundreds of thousands of interactions per month.
Why Facebook Won’t Just Buy Cameo
With this kind of demand booming, it’s no surprise that Facebook wants to jump into the niche. Considering Facebook’s history, it wouldn’t even be surprising if the juggernaut were interested in acquiring Cameo. However, Facebook’s strategy of acquiring upstarts who could one day become viable competitors is currently under close scrutiny – the FTC and state attorneys general have just sued the company, alleging it built an illegal monopoly by buying out the competition.
Legal complaints call for the dissolution of Facebook, in particular Instagram and WhatsApp, which were both acquisitions. Attempting to acquire Cameo would only stoke other reviews at exactly the worst possible time. In all likelihood, Facebook will just try to copy Cameo and quietly shut down Super a few months after launch when it fails to start Cameo’s growth.