Facebook (s fb) is likely to announce its own interpretation of Android tomorrow, perhaps in partnership with HTC. This will be company’s first full-scale assault on the mobile business, a move that is being watched with much interest in the executives offices of Google, (s goog) Apple (s aapl) and Twitter. But even without, the company seems to be doing quite well on the mobile — relatively, speaking.
For instance, Flurry Analytics pointed out Wednesday in a new release that in the U.S., smartphone users spend 18 percent of their time spent on smartphones on Facebook. And what’s more important, Facebook tends to keep the Facebook Mobile users inside the app, instead of sending them out to other apps or browsers. As Flurry noted:
…it appears that mobile, once perceived as Facebook’s Achilles’ heel, has become Facebook’s biggest opportunity. Consumers are spending an average of nearly 30 minutes per day on Facebook. Add to that Facebook’s massive reach, as well as their roughly billion mobile users per month and you have a sizable mobile black hole sucking up peoples’ time. The 30 minutes a day is a worldwide average which means a large group spends even more time on Facebook (possibly hours) watching and participating in what has become the ultimate reality show in which the actors are you and your friends.
Well, that does translate into big dollars for the company. According to market research firm eMarketer, Facebook is likely to bring in about $965 million in mobile advertising in 2013 and will see that number grow to $1.51 billion in 2014.
Facebook, the No. 2 mobile ad publisher in the country, accounted for 9.5% of mobile ad revenues in 2012 and is expected to take 13.2% this year. In the mobile display market, however, Facebook is on top, projected to grab nearly three in 10 dollars this year. eMarketer revised Facebook’s share of US mobile display advertising ad revenue upward by several percentage points after fourth quarter results came in higher than previously expected.
Now here is the problem: if folks are spending so much time on mobile already and all they can make is a billion dollars, how does the company start to goose up the overall revenues and justify its massive market capitalization? Any thoughts?
Related piece: A Facebook Phone: Is this the final brick in the social network’s walled garden?
Om, I have always looked at Facebook as the second coming of Microsoft, and in this context, the smartest thing that Facebook could do would be to “embrace and extend” the mobile web so that users never really leave the Facebook environment.
What that would do is enable them to: A) build a strong developer ecosystem alternative to iOS and Android that bridges desktop, mobile web and mobile native; B) Establish a billing relationship with their users in a manner that only Apple and Amazon can equal; and C) Build a user and usage graph that is far richer than anyone, even Google, can offer.
There are lots of ways that those domains could be monetized. Plus, it sets up a mega merger between Microsoft and Facebook in 2015. 🙂
holy crap you are drinking too much Facebook kool aid.
lol! Richard Torcato – I would agree, but I know Mark and he is no Kool Aid drinker. 🙂
Ad network anyone?
“Any thoughts?” Sure, but if I tell you I have to …, ok you own me a coffee.
Google Business Value = Eyeballs * Intent [0-1 range]
FB Business Value = Eyeballs * ???
Is there anything better than intent? Google wants to “search” before you know you need to do a “search”. What is required as an enabling data organization ….. context. To enable it one has to know how context is created and used {past, present, prediction (also known as a goal)}. Google has a guessed prediction (intent), FB has better past(?), present and needs to get to the prediction. Or how to convert research into a multiplier for eyeballs by not focusing on brand but on brand product. Or make it an Apple store for the rest, today’s highly standardized product comparison tables are, just to say to say it nicely, inadequate. Something Google can’t fix, keywords ….
Some good thoughts here Ronald. THanks for sharing/
Om, do we know if phone calls and text messages fall under apps in the pie chart? If so, under what type of apps?
No they don’t Jo. Thanks
I expect that this version will be used just as an ambit to get people interested. In future versions, Facebook will add options/seek permission to track other usage on the phone from users (eg: calls, location, etc.). If that’s the case, Facebook can build a much better ad targeting platform, using all it knows from the social graph + what it can learn from consumer phone usage beyond just the Facebook app.
That could be one reason for them to launch this on Android.
the sky’s the limit and fb has been thrown as high as it can go
Tim
I am not sure I understand. Can you explain in detail.
Best
Salutes to Mark Zuckerberg for being audacious and willing to try all possibilities to generate more revenue for the company. Along the way I hope he will not compromise his integrity and our privacy. I’ve yet to find a ad on FB which was useful or motivating enough for me to buy something. Instead my timeline has been flooded with spam which continues to come even after I mark it as spam. 🙂 I hope the phone will not interrupt my voice calls with jingles based on the context of my conversation. That would be very disturbing (and scary). Then again if they give the phone and service for free i’m fine with it. 🙂
Thank you for covering this event.
Chirag
Zuck is going to float this only so long as he can create ROI for advertisers and Facebook. I dont think the medium has that kind of legs with out taking a mandatory approach to engagement!
However, I havent drank the Koolaid and I am not sure he is going to make that shift the way he needs to.