Three Ways Facebook Can Win in Mobile
With its $5 billion IPO official, Facebook can finally breathe a sigh of relief, right? After all, the target valuation is a whopping $100 billion, and there are 845 million people logging on each month. Think again. The company’s S-1 filing with the SEC revealed that Facebook is vulnerable in mobile. First, mobile usage isn’t generating “any meaningful revenue.” Second, the social network is at the mercy of Apple and Google, which have chosen not to integrate Facebook into their latest smartphone platforms.
This passage from the filing pretty much says it all:
“We are dependent on the interoperability of Facebook with popular mobile operating systems that we do not control, such as Android and iOS, and any changes in such systems that degrade our products’ functionality or give preferential treatment to competitive products could adversely affect Facebook usage on mobile devices.”
For Facebook to flourish in the post-PC era, it will need to weigh the following options or risk becoming an also-ran in the next big stage of social.
Option 1: Hug it Out with Apple
Probability: 50 Percent
There’s no question that Facebook is a powerhouse in mobile, with 425 million people accessing the network each month from a mobile device. But the lack of Facebook integration in iOS 5 and Android 4.0 should trouble Zuckerberg and Co. Want to share a photo or Web article on your iPhone 4S with your Facebook friends? You have to use the Facebook app. Meanwhile, you can post photos and links directly to Twitter from within the iOS Camera app and Safari, respectively.
On Android phones it’s even worse news for Facebook. Google+ is the default service used to automatically back up your photos, video chat and instant message, so millions of people will be introduced to Facebook’s main rival upon using an Ice Cream Sandwich device. When I asked Google over the summer about a possible ETA for Facebook integration with Android 4.0′s People App (contacts), I got the following vague response:
“There’s an open API for any developer to use, so it’s up to third-party developers to integrate.”
Despite this statement, it doesn’t seem likely that Google would ever promote Facebook to the same status enjoyed by Google+.
That leaves iOS. When Apple launched its Ping social network for music, the company had a falling out with Facebook over what Steve Jobs called “onerous terms.” Facebook needs to find common ground with Apple on achieving first-class status in iOS, alongside Twitter.
Option 2: Say “Fork You” to Android with a Facebook Phone
Probability: 60 Percent
If you look at the Facebook app on an iPhone today and open the slide-out menu, you’ll see a category called Apps. From here you can link off to apps that integrate with Facebook, from Instagram and Bejeweled to Spotify. In a way, the Facebook app is a platform within a platform. But as the company noted in its IPO filing, it simply doesn’t control its own destiny in mobile. Some have suggested that Facebook should launch its own phone, a device that would go much further than a single share button on the HTC Status. One way Facebook could challenge Android and Google+ would be to pull an Amazon and “fork” Android to suit its needs.
The Kindle Fire looks nothing like traditional Android but has quickly become the No. 2 tablet behind the iPad. Why couldn’t Facebook do the same thing with phones? A Facebook phone would have its own curated app store of Android apps, and all of them would connect with Facebook in some way. Such a phone would also sport its own browser that let people like or share articles via Facebook with a tap (similar to Rockmelt on the desktop).
Just as importantly, Facebook would be able to experiment more boldly with integrating ads in different parts of its OS, which is critical to generating more revenue.
Although Google likely wouldn’t allow Facebook to use Google Wallet, Facebook could leverage NFC technology to enable users to redeem Facebook deals with a swipe. A layer on top of the maps app would show you where your friends have checked in and display what local offers are available.
There’s no way Google or Apple would allow this type of integration, which is exactly why Facebook might need to take matters into its own hands. Another option would be to adopt Tizen, an open-source Linux OS backed by Intel and Samsung, but it would take much longer to build an app ecosystem. Open sourcing webOS will also take too long.
Option 3: Strengthen Your Ties with Windows Phone
Probability: 70 Percent
I’m not convinced that Windows Phone will become the No. 2 mobile OS come 2015, as IHS iSuppli has suggested. But the platform will certainly gather momentum over the next couple of years as Nokia puts its full weight behind Microsoft’s software and Windows 8 debuts with a similar interface.
Windows Phone happens to integrate with Facebook pretty well already, displaying the latest status of your friends in the People hub and showing you the latest posted photos in the Pictures hub. And while it takes too many steps, you can share websites via Facebook within IE Mobile.
This level of integration isn’t a surprise, given that Microsoft purchased a 1.6 percent stake in Facebook back in 2007. Since then, the two companies have collaborated in other ways, including advertising initiatives and incorporating Facebook recommendations in Bing search results. But Facebook should attempt to go even further with Windows Phone, especially with Xbox Live.
Zuckerberg could easily point to the fact that Zynga accounted for 12 percent of the company’s revenue in 2011, and remind Microsoft that the company behind Farmville has yet to deliver a single game for Windows Phone. Perhaps Facebook could convince Zynga to devote more resources to Windows Phone in exchange for deeper Facebook integration across Microsoft’s multiple platforms, including the Connect feature of Windows 8.
What’s the Answer?
The above three paths are not mutually exclusive. While getting Google to put Facebook on the same level as Google+ is pretty much out of the question, the social network should do whatever it can to strengthen its ties with Apple. Twitter alone simply won’t help iOS realize its full social potential, so Facebook and Apple will need to iron out terms that are favorable to both parties. In the meantime, Facebook should be developing its own mobile platform on the back of Android and getting cozier with Microsoft on both Windows Phones and Windows 8 tablets. For Facebook to be worth that $100 billion, it will need to “Like” all of the above options.
Editor-in-chief Mark Spoonauer directs LAPTOP’s online and print editorial content and has been covering mobile and wireless technology for over a decade. Each week Mark’s SpoonFed column provides his insights and analysis of the biggest mobile trends and news. You can also follow him on twitter.