NEW YORK (TheStreet) -- Shares of Facebook (FB) - Get Report closed down 2.8% at $82.92 on the first day of the company's two day F8 developer conference in San Francisco, where the social media giant announced plans to extend capabilities for advertising technology and expanded features of its messenger service.
Facebook announced plans to take LiveRail, the Web video ad technology firm it acquired last year, and extend its capabilities to display ads on desktop websites and ads that appear in mobile apps, the Wall Street Journal reports.
With LiveRail and Atlas, the ad serving platform that Facebook acquired in 2013, Facebook is directly challenging Google (GOOG) - Get Report as it aims to become the dominant back-end systems operator for digital advertising, the Journal noted.
Facebook also announced new products called Messenger Platform and Businesses on Messenger. Both will let application makers and online retailers hook into the messaging application to grow their own audiences or communicate with customers.
The additions mark an important new direction for Messenger, which now has a monthly audience of more than 600 million people, and signal that the app has graduated from a hobby chat app and will be treated instead as the company's next big business.
Separately, the company announced a money transfer option last week.
SunTrust Robinson Humphrey said it sees several benefits of the product for Facebook, maintaining its "buy" rating and $90 price target on the stock.
"While the new payments feature that is only in Messenger is 'free' (will not be monetized for P2P transactions), we believe the long anticipated feature (after the hiring of former PayPal President David Marcus) could have a large impact on the company in the future," analysts said.
Insight from TheStreet's Research Team:
Facebook is a core holding of Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. During the most recent weekly roundup, this is what Jim Cramer, Portfolio Manager and Jack Mohr, Director of Research - Action Alerts PLUS had to say about the stock:
Shares charged to new all-time highs following the company's announcement Tuesday that it is adding a new feature in Messenger that gives people a "more convenient and secure way" to send or receive money between friends. The company said it will be rolling out the feature over the coming months in the U.S. and indicated the service will be free. We believe this is a great move for Facebook, whether or not it is a direct revenue generator for the company (it looks like it will not be, at least initially).
International money transfer is a $500 billion market (in annual revenue), with $3 trillion exchanged daily across the globe. The demand for such a service, especially within an already established network of 1.4 billion users, is real, and we are glad to see Facebook not only leveraging its ecosystem but deepening it even further. We expect that the move will go a long way in further strengthening Facebook's user engagement, which is already the highest across any site or social network. In fact, we learned this morning that Facebook's share of mobile minutes accelerated to 22% in February, well above its peers at 5%. Its share of total Internet minutes across both mobile and desktop stands at 18% and is over 5x the minutes spent on Twitter and Snapchat. Our target is $90.
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TheStreet Ratings team rates FACEBOOK INC as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate FACEBOOK INC (FB) a HOLD. The primary factors that have impacted our rating are mixed, some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and impressive record of earnings per share growth. However, as a counter to these strengths, we find that the company's return on equity has been disappointing." You can view the full analysis from the report here: FB Ratings Report