Facebook buys AI startup Ozlo to enhance Messenger (FB)

Messenger MAU Growth

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On Monday, Facebook announced its acquisition of artificial intelligence (AI) startup Ozlo, likely to augment the capabilities of M, Facebook’s virtual assistant for Messenger, according to VentureBeat.

Ozlo, which developed the Ozlo app for iOS and Android, specializes in understanding ambiguous phrases in subjective text-based conversations — for example, determining whether a restaurant is “group friendly” or serves good oysters.

The acquisition could help Facebook build more compelling AI-powered experiences within Messenger. Ozlo’s knowledge graph is one of the firm's key differentiators. Knowledge graphs leverage enormous fact databases to develop intelligent AI tools. Although not confirmed, Ozlo’s knowledge graph could serve as the backbone of Facebook M.

Improving M’s capabilities will help the virtual assistant better understand users’ conversations, and provide more intuitive suggestions. This could increase brand discovery on Messenger, making the platform more valuable to businesses. Earlier this year, Facebook Messenger VP David Marcus solidified Messenger's aim to become the new Yellow Pages. The company is inching closer to its goal — as of April 2017, Messenger supports more than 20 million businesses globally.

In many ways, Facebook is playing catch-up in the AI space, and the Ozlo acquisition could help the company advance its standing. Amazon, Apple, Google, and Microsoft have all established a presence in the virtual assistant market, and they're rapidly gaining mindshare among consumers. This could inhibit adoption of Facebook’s M, which, despite its 1.2 billion strong monthly active user base, has only been rolled out to a small number of Messenger users.

Jessica Smith, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on the voice assistant landscape that:

Identifies the major changes in technology and user behavior that have created the voice assistant market that exists today.
Presents the major players in today's market and discusses their major weaknesses and strengths.
Explores the impact this nascent market poses to other key digital industries.
Identifies the major hurdles that need to be overcome before intelligent voice assistants will see mass adoption.

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