Meta’s cost-cutting measures have had another impact, with its DM automation service, Kustomer, which it acquired back in 2020, being divested. Despite this ‘L’, Meta is set to remain as one of the platform’s minority stakeholders.
For a little context, Kustomer specializes in AI detection of customer queries, then either responding automatically, based on the prompts inputted, or re-routes messages to human service representatives.
Kustomer Is Right
Meta had originally planned to integrate Kustomer into its DM customer service tools, with WhatsApp business being the main focus. However, amid broader cost-cutting measures at the company, which has seen it lay off thousands of employees, and shelve various projects, the Kustomer integration has become another casualty, with Meta instead looking to focus on its evolving business tools within WhatsApp itself.
“Today marks a significant milestone for Kustomer as we begin our next chapter as an independent company. We’re poised for even greater success with the backing of our original partners who have invested $60M in capital to ensure Kustomer’s growth for many years to come. More importantly, we bring a core team of dedicated professionals who believe in our mission to elevate every customer experience by transforming the way businesses and consumers communicate.”
It could be that Kustomer still becomes a valuable DM service tool, linked into Meta’s DM offerings. It just won’t be a directly integrated service – though DMs are a key focus for Meta moving forward, in line with evolving usage trends.
Given how the project never reached its intended final stage, it’s not a major deviation for Zuck and friends, but it’s another casualty nonetheless. Meta’s digital RnD division Reality Labs recorded a $3.99 billion operating loss in Q1 2023, which puts it on track to beat last year’s $13.7 billion total loss.
The Wrap
With losses like these, Meta needs to be more rational with its spending in other areas, and Kustomer is the latest to be dropped as a result of a bigger shift in focus and cost-cutting. Will that be an issue in the short-term, as Meta continues to build its next-level vision? Meta’s clearly confident that it can establish its business managing tools without Kustomer, and, as noted, it continues to build its WhatsApp business tools, which also reportedly includes more AI elements.
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