Amazon.com, Inc. (AMZN) Spark Will Result in a Small Business Exodus From Facebook Inc (FB)?

Not a month goes by that Amazon.com, Inc. (NASDAQ:AMZN) doesn’t tap into a new business segment, despite the fact that the company is one of the fastest growing entities, having massive market shares in major markets like Cloud, content and of course, ecommerce. Last month, Amazon.com, Inc. (NASDAQ:AMZN) launched its first foray into the social media industry. The company announced a new social media app, Spark. Spark is a product discovery platform where users share inspiration, reviews, ideas and thoughts about different products. It’s an image based platform, having a striking resemblance to Facebook’s Instagram and Pinterest. With Spark, Amazon.com, Inc. (NASDAQ:AMZN) wants to transcend the limits of just being an ecommerce company, and plans to inspire people to buy more stuff from its website. But does Amazon Spark pose a threat to Facebook Inc (NASDAQ:FB) or Instagram? In the short term, No. But if the new social platform gets traction and fame, small businesses may move away from Facebook Inc (NASDAQ:FB). Currently, over 3 million businesses actively advertise on Facebook. Facebook earned $26.9 billion from ad revenue in 2016. Advertisers love Facebook Inc (NASDAQ:FB) Instagram, because its image-based feeds play a key role in hooking the potential customers between the ages of 18-35. Amazon.com, Inc. (NASDAQ:AMZN) spark is following the same model.

When a user signs up on Amazon Spark, they select the categories they are interested in. After initial setup, they start seeing photos in their feed. Every photo has small shopping bag icon, with a number that represents the total shoppable items in the photo.

Amazon is trying to build an ecosphere around its ecommerce empire. Photos on Spark have a “Shop Now” button, which takes users directly to the shopping page on Amazon.com, Inc. (NASDAQ:AMZN) for the items in the photos, without leaving the app. Unlike Amazon reviews, which have a very negative reputation, people will get to see more real and honest reviews on the Spark platform. The social media app will also make product discovery easier, which would result in more sales. Spark users who post regular and honest reviews get a badge of “Enthusiasts” on the app by Amazon.

Matt Britton, CEO of marketing firm Crowdtap, thinks that Amazon.com, Inc. (NASDAQ:AMZN) will leverage a major ecommerce opportunity with Spark. He thinks that Pinterest could have monetized its user base, but the platform lacks inventory connection and ecommerce backup. Britton thinks that Spark will attract Pinterest users, especially in categories like home decor and fashion.

Spark users can comment on each other’s posts and react with a “Smile”, similar to Facebook Inc (NASDAQ:FB) likes and Instagram favorites.

Amazon.com, Inc. (NASDAQ:AMZN) Spark is just getting started. Currently, it is no match to Facebook Inc (NASDAQ:FB), which has about 2 billion active users. But Spark will give Amazon a nice Launchpad for future initiatives in the social media industry.

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