Facebook, Inc. FB is adding yet another quirky feather to its cap. The social media company is acquiring Masquerade, a selfie app (MSQRD). Masquerade has become popular for its face-swapping technology and allows users to make their own animated videos for social media.

However, Facebook is not the only company with an eye for such technologies. This last September, its rival, Snapchat had also acquired a selfie animation app Looksery to power its Lenses offering.

Though, unlike Looksery, Masquerade will remain operational as an independent app even after the acquisition. Facebook, on its part, will definitely be using its novel selfie filters to enhance some of its own products in due time.

How Will Masquerade Benefit Facebook?

This acquisition (yes, the technology and the people who build them) will allow Facebook to quickly scale up its own plans for more interactive videos, for which it is already putting in a lot of effort.

Additionally, we can speculate that Facebook will also deploy Masquerade’s capabilities to add to its all-new VR social network. Facebook is in the process of creating a new social network for VR environments. While the Rift is not yet available, people buying an Occulus-powered Samsung Gear VR headset can enjoy the experience.

Yesterday, Facebook and Samsung SSNLF jointly announced the headset and said that users will be able to create their virtual social network profile, therefore making the interaction much more fun. The company will also enable sharing of Oculus Video content through the main Facebook platform next week.

Bottom Line

Online video has been gaining traction over the last few years resulting in increased spending on video ads as well. Per research firm eMarketer, the online video advertising market will grow 28.6% in 2016 to $9.6 billion, representing over 14% of the total digital ad spending.

Facebook’s massive user base and the number of initiatives that it has taken on the video front (Live Video streaming, Video Tabs, 360-degree VR Videos etc) have placed it well to tap the booming video ad market. At the end of the last reported quarter, Facebook revealed that its users already watch 100 million hours of video each day. The aforementioned acquisition further gives it an edge over its peers like Twitter TWTR and Alphabet GOOGL.

On the other hand, Masquerade is set to benefit from Facebook’s huge user base. As they put it, “Within Facebook, we’re going to be able to reach people at a scale like never before. For starters, we’ll be able to bring our technology to Facebook’s audience of nearly 1.6 billion people. This is a scale of audience we never imagined was possible.”

At present, Facebook carries a Zacks Rank #2 (Buy).

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >



Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report



FACEBOOK INC-A (FB): Free Stock Analysis Report



ALPHABET INC-A (GOOGL): Free Stock Analysis Report



TWITTER INC (TWTR): Free Stock Analysis Report



To read this article on Zacks.com click here.



Zacks Investment Research