Facebook is preparing to copy Cameo

The social networking giant is developing a new feature that connects fans with celebrities.

| More on:
Facebook stock represented by facebook founder Mark Zuckerberg giving speech on stage

Image source: Facebook

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

In a move that has become all too familiar, Facebook Inc (NASDAQ: FB) has noticed an upstart social media app that is gaining traction and wants to take a bite out of the smaller company's growth. The dominant social media network has deployed this playbook countless times over the years, oftentimes attempting to acquire a promising new start-up while simultaneously threatening it by competing through copying.

The latest target is Cameo, an app that allows users to pay celebrities to deliver personalised messages.

Coming after Cameo

Bloomberg reports that Facebook is developing a new feature called Super, which very closely resembles what Cameo does. Super will allow content creators or celebrities to host virtual events where the audience can send tips or digital gifts. Viewers will also be able to pay for the privilege of appearing directly in the event's livestream, according to the report.

Facebook's New Product Experimentation (NPE) team is said to be behind the app's development. That division was created over the summer of 2019 with the explicit task of testing out new ideas, and the team is reportedly working on apps that basically compete with everyone. The social networking tech giant has made it clear that NPE is a riskier endeavor and won't hesitate to shut down apps that fail to gain traction. Several apps have already been shuttered, most recently including Hobbi and Lasso, which were trying to replicate Pinterest and TikTok, respectively.

Founded in 2016, Cameo connects celebrities with fans, who can pay for personalised videos and messages. The celebrity sets the price, with the start-up taking a 25% cut of all transactions. Users can request that the celebrity perform specific actions or say certain things, and clips often go viral  on social media.

The company had raised $50 million last summer in a Series B funding round at a $300 valuation, according to Axios. Cameo's popularity has surged during the COVID-19 pandemic, as the platform is a way for people to connect virtually while staying at home. As a small private company, Cameo does not regularly disclose many details around its business but has said it facilitates hundreds of thousands of interactions per month.

Why Facebook won't just buy Cameo

With that type of booming demand, it's no surprise that Facebook wants to jump into the niche. Considering Facebook's history, it wouldn't even been surprising if the juggernaut was interested in acquiring Cameo. However, Facebook's strategy of acquiring upstarts that could one day grow to become viable competitors is under extreme scrutiny right now -- the FTC and state attorneys general have just sued the company, alleging that it has built an illegal monopoly by buying up the competition.

The legal complaints call for Facebook to be broken up, specifically from Instagram and WhatsApp, both of which were acquisitions. Attempting to acquire Cameo would just stoke further criticisms at exactly the worst possible time. In all likelihood, Facebook will simply try to copy Cameo and quietly shut down Super a few months after it launches when it fails to make a dent in Cameo's growth.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

Should you invest $1,000 in Netflix right now?

Before you buy Netflix shares, consider this:

Motley Fool investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now... and Netflix wasn't one of them.

The online investing service he’s run for over a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

And right now, Scott thinks there are 5 stocks that may be better buys...

See The 5 Stocks *Returns as of 30 April 2025

Evan Niu, CFA has no position in any of the stocks mentioned. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Facebook and Pinterest. The Motley Fool Australia has recommended Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on International Stock News

A woman holds a soldering tool as she sits in front of a computer screen while working on the manufacturing of technology equipment in a laboratory environment.
International Stock News

Prediction: This artificial intelligence (AI) stock will be worth $5 trillion in 3 years

Let's take a closer look at the catalysts that could propel this stock toward that valuation.

Read more »

A woman sits at her computer with her chin resting on her hand as she contemplates her next potential investment.
International Stock News

This Artificial Intelligence (AI) chipmaker just got a game-changing boost from Amazon, and Nvidia investors should be paying close attention

Amazon just made a notable investment in Nvidia's top rival.

Read more »

Happy man working on his laptop.
International Stock News

A once-in-a-decade opportunity: Here's why I'm buying Alphabet stock like there's no tomorrow

Alphabet's stock rarely gets this cheap, and right now could be a once-in-a-decade opportunity to scoop up shares at a…

Read more »

A woman looks questioning as she puts a coin into a piggy bank.
International Stock News

Is Warren Buffett's Berkshire Hathaway the smartest investment you can make today?

So, with all the uncertainty, is Berkshire Hathaway the smartest investment you can make today?

Read more »

Warren Buffet
International Stock News

7 ways Warren Buffett changed my investing approach

I'm a big fan of Warren Buffett, and have been for many years.

Read more »

iPhone with the logo and the word Google spelt multiple times in the background.
International Stock News

Down 12% this year, should you buy Alphabet stock?

The Google owner is underperforming the Nasdaq Composite, which has rallied in recent weeks.

Read more »

A male investor sits at his desk looking at his laptop screen holding his hand to his chin pondering whether to buy Macquarie shares
International Stock News

Missed out on Apple in 2012? Buying Nvidia stock today could be your second chance

By now, it's clear that artificial intelligence (AI) is the next major technology platform.

Read more »

Robot humanoid using artificial intelligence on a laptop.
International Stock News

3 reasons Amazon stock looks like an incredible bargain right now

Here are three reasons Amazon stock looks like a rare bargain at current levels.

Read more »