Sunday, August 21, 2016

How Facebook and Lyft tackle identity issues: The TechCrunch Sunday Snapshot

THE DAILY CRUNCH
SUNDAY, AUGUST 21 2016 By Darrell Etherington

Sunday Snapshot 08/21/16

Starting this week, Sunday's daily email newsletter from TechCrunch will zoom in on what's really important with an analysis of two or three key tech news stories in tech from. Please enjoy, and let us know what you think of the new format.

Identity crises: They're what happens when product direction meets with a potential growth ceiling, and companies look for something more than evolution, like a shift into something entirely new to avoid fading into irrelevance.

Two fresh examples come to mind – Lyft, which rebuffed a GM acquisition offer, but not before shopping itself around, with a proposed purchase price of $9 billion that no one wanted to swallow; and Facebook, which just launched Lifestage, a 21-and-under social network created by a 19-year old product manager with a product name that's supposed to be a theatrical gag, but that sounds more like an insurance company targeting the 50-plus crowd.

Lyft is looking for a more permanent dance partner in a market where scale is the key to successful financials. Uber has a lead that would almost be laughable, were it not for the fact that Lyft is essentially second (in North America at least) with no credible third player sneaking up to take its place. And it's easy to see why Lyft is anxious about filling the car technology gap, when Uber and Captain Kalanick are set to pick up their first passengers with self-driving cars this month.

Facebook is absolutely dominating social media in terms of pure reach, with over 1.13 billion daily active users. If it's the Uber of social tech, it actually owns its Lyft; Instagram, which has over 300 million daily active users and which recently crossed the 500 million mark in people who use the service at least once a month. But Zuck's anxieties aren't about the big dog on the block – they're reserved for the smart street mutt that might just jump out of an alley and grab the bone while no one's looking.

Lifestage reveals FB looking beyond Snapchat, whose audience seems to be aging up, to younger companies with younger audiences, like Musical.ly. And there's an older competitor that has managed to reinvent itself for the U.S. youth market, too – Canada's Kik, which claims a 40% usage rate among U.S. teens.

Lyft is playing a dangerous game of large numbers in a market where its competition is taking up all the air, and prospective acquirers are looking at smaller, more affordable targets to compliment their engineering expertise. Facebook is pushing the gas on internal skunkworks to try to remain as nimble as internal threats.

In both cases, it comes down to speed and size, and making sure you have the right mix of each. Identity issues are nothing new to the tech industry, but watching them play out can be critically instructive for others hoping to chart similar paths.

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