Facebook acquired Ozlo to help boost its online chatting application (Messenger) ability to help its users and predict their needs via Ozlo’s AI technology. Facebook’s Messenger already are gearing towards understudying the users via a series of virtual assistants, Facebook look to increase that capabilities with Ozlo’s technology.
Facebook’s Messenger app earlier this year rolled out a virtual assistants that aimed to provide recommendations to the users based on their conversations, the move to include Ozlo means Facebook is seeking to increase the capabilities and expertise from Ozlo to make the program to robust.
The technology will be focused initially on text-based conversations on the Messenger, unlike Apple’s SIRI which is a voice-based virtual assistant. According to a spokesperson, they wanted to make sure they got the text-based AI technology nailed before they move to voice-based assistants.
Majority of Ozlo’s 30 persons team will join Facebook’s offices in Menlo Park, CA or Seattle, WA. The financial terms of the sale is not disclosed.
Facebook is a social media giant with global users. Its core business is understanding and categorizing people’s lifestyles, their social media interactions and monetizes them via product placements and ads, among others. It is only natural that Facebook seek to use Artificial Intelligence to help understand, aggregate and identify key selling opportunities to its users. Netflix has been using AI it to provide better, more personalized recommendations to its 100 million subscribers worldwide, reducing movie searching time, a big reason for cancelled subscriptions.
Using artificial intelligence also allows two things to happen: making the art of understanding people’s needs/choices into a scientific and quantifiable endeavors, as supposed to relying on its human employees’ interpretations, which is subjective and inconsistent. It may also eventually replacing humans as its employees in the long run, reducing costs and errors.
I think AI will play an increasingly key role in Facebook’s operations and core business investments. With Google’s DeepMind, Amazon’s Alexa, Apple’s SIRI and Microsoft’s Cortana, many have invested time and resources to stay ahead of the game. Recently Amazon acquired KIVA, a robotic system that automates shipping, already inventory capacity increased by 50% while operating costs fell an estimated 20%.
According to a 2017 McKinsey report, corporate M&A is soaring in this area with the Compound Annual Growth Rate (CAGR) reaching approximately 80% from 20-13 to 2016. Tech giants including Baidu and Google spent between $20B to $30B on AI in 2016, with 90% of this spent on R&D and deployment, and 10% on AI acquisitions.*
Facebook must be able to integrate AI into its business and acquire more related expertise to help with its ever growing users. This will allow Facebook to concentrate its most valuable talents and resources to focus on expanding the company’s reach and influence and keep up with the tech world’s ever changing goal post.
Wagner. K. “Facebook acquired an AI startup to help Messenger build out its personal assistant” Recode. Web. 31 July 2017. <https://www.recode.net/2017/7/31/16071646/facebook-acquisition-ozlo-artificial-intelligence-ai-messenger-personal-assistant>
* Bughin. J, Hazan. E, Ramaswamy. S, Chui. M, Allas. T, Dahlström. P, Henke. N, and Trench. M “How Artificial Intelligence Can Deliver Real Value To Companies.” McKinsey Global Institute June 2017. <http://www.mckinsey.com/business-functions/mckinsey-analytics/our-insights/how-artificial-intelligence-can-deliver-real-value-to-companies>