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Senior director David Proulx says BlackBerry will impose limits on how often companies can push out alerts. (Mark Blinch for the Globe and Mail)
Senior director David Proulx says BlackBerry will impose limits on how often companies can push out alerts. (Mark Blinch for the Globe and Mail)

Can BlackBerry make its new BBM profit plan stick? Add to ...

In the next week BlackBerry Ltd. will roll out an update to its popular BBM messaging app that will include two possible revenue generators for the company: selling “stickers” to its users, and selling its users to advertisers.

The company is moving rapidly to expand the reach of BBM – until October, 2013, it was only available to BlackBerry phone users – as it attempts to build a strong contender in the global over-the-top chat market that is rapidly replacing SMS and e-mail for millions of smartphone users. Valuations for successful chat apps have gone through the roof in recent months, with Facebook paying $19-billion for the lead player, WhatsApp.

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David Proulx, senior director of BBM Business Development, told reporters the company would continue to experiment, though “at no point should monetization come at the expense of the user.” He said the app was still in the early phases of adding features to keep up in the crowded chat and communication app space.

The stickers will be available via a new BBM Shop, which will sell “virtual goods” that allow users to customize their app. Stickers, a sort of supersized emoticon embedded in chat apps, are relatively new to North America, but are hugely popular in Asian countries.

They can also be hugely lucrative. For example, BBM competitor Viber (which was sold to Japan’s Rakuten for $900-million) said in January that its 300 million users had downloaded 100 million sticker packs in the first three months it offered them. Users will typically use stickers in place of a longer written sentiment. “It’s not just a novelty,” Mr. Proulx said. “It is a better experience.”

BlackBerry’s version of stickers will feature brand partnerships – with the wrestlers of WWE and the children’s show Shaun the Sheep at first. The cost of a “pack” of stickers starts at $1.99, with a portion of each sale going to the content creator. BlackBerry is eschewing a wide-open marketplace, where vendors sell directly to users, instead insisting on approving sticker apps.

BlackBerry also unveiled a mobile marketing strategy that borrows from Facebook and Twitter’s sponsored posts, and which the company said has the potential to earn much more. BlackBerry has three paid offerings for advertisers: Prominent placement on its BBM Channels landing page (BBM channels, such as the Toronto Maple Leafs, are similar to Facebook brand pages), sponsored updates that send users alerts about new features or offers, and sponsored invites to follow a brand’s channel.

BBM will slice up its 85 million monthly active users to allow geo-targetting, and will charge brands according to how many people they are trying to reach.

BBM’s marketing tools will be more effective than SMS or mobile display advertising, Mr. Proulx said, but BlackBerry will impose limits on how often companies can push out alerts, to keep users from feeling spammed. While he declined to give details on how many people BlackBerry is employing to implement these two initiatives, Mr. Proulx said the company was making a significant investment to ensure the system doesn’t degrade the chat experience.

Eric Setton the co-founder of Tango, a competing chat startup that offers games and multimedia sharing to its 70 million monthly active users, said “the fact that BBM is beginning to monetize and add advertisers and channels validates the opportunities we see in this space as messaging apps continue to evolve beyond communication utility tools.”

Analysts were open-minded, but skeptical of the move. “I don’t think this is within the main focus of the company,” says Richard Tse, technology analyst with Cormark Securities. Mr. Tse thinks these updates are not essential to BlackBerry’s near-term strategy. The company, led by CEO John Chen, “really is more focused on fortifying the enterprise side.”

The chat app marketplace is crowded and fickle, and BlackBerry is still a relatively small player, although it continues to grow. “We believe service revenues continue to slide on subscriber losses, and MDM/BBM is unlikely to offset the declines any time soon,” wrote Tim Long of BMO Capital in a research note previewing Friday’s fourth quarter earnings report.

For business customers who use BBM to communicate, Mr. Proulx announced a service called BBM Protected, which will offer increased security and will be rolled out this summer. The service will add a second layer of encryption, and notify users when they were chatting with someone who is using the enhanced product.

With the latest moves, it seems unlikely that BlackBerry will seek to sell BBM in the short term. In the past, Mr. Chen has suggested that if a suitor willing to offer billions stepped forward he would consider it.

Follow on Twitter: @shanedingman

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