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April 5, 2013updated 19 Aug 2016 9:27am

Facebook builds a home on Android: expert reaction

Social networking site has 'out-Googled Google'

By

Social networking behemoth Facebook yesterday announced a major new development aimed at capturing a greater share of eyeballs on mobile platforms, specifically Google’s open source Android operating system.

While it has been speculated that Facebook would do its own smartphones or mobile operating system in order to better monetise the 70% of its billion-plus users who access the site on a mobile or tablet, yesterday CEO and founder Mark Zuckerberg said that would be the "wrong strategy".

Instead it launched Home, a skin that sits on top of Android and which it says makes a mobile home screen centred on people rather than apps. Features include Cover Feed, which replaces the traditional Android home screen and allows users to swipe through photos and status updates posted by their contacts; and Chat Heads which let users interact with their friends while using other apps, which are accessed through Facebook’s new App Launcher.

"We’re not building a phone or an operating system but we are building something that’s much deeper than an ordinary app," Zuckerberg said. "The home screen is the soul of the phone. You look at it about 100 times a day and it sets the tone for your whole experience. We think it should be deeply personal."

Technology analyst Zeus Kerravala was quoted by Sky News saying Facebook Home is "an interesting idea", adding: "If anyone can pull it off Facebook can."

He said: "People spend more time on Facebook than on any other app so a device with the look and feel of Facebook, I imagine, will be hugely popular. What Facebook has had trouble with is monetising mobile – what they can push to users and when. That is what Wall Street has been critical of."

Jeff Chester, executive director of the Centre for Digital Democracy, warned that Facebook users should be aware of privacy issues: "Rather than merely looking in on our data, as they do with an app, this will give Facebook much greater control of that data," he said. "Geo-locating technology is what it is all about right now. It is that data they need for marketing and advertising and it is what they want to be able to show to Wall Street."

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Jan Dawson, chief telecoms analyst at Ovum, had the following initial reaction: "Any broadening of Facebook’s appeal on mobile devices would have to be broad-based, and the Android launcher approach allows it to target a huge installed base of hundreds of millions of Android users, which will be a large chunk of Facebook’s total user base of more than a billion people.

"To users, the sell here will be making it easier to share information, photos and so on with friends. But to Facebook, this is about becoming more deeply embedded in the operating system on mobile devices, and creating a broader platform. Since Facebook doesn’t make an operating system for mobile devices, this is the next best thing. It will allow Facebook to track more of a user’s behaviour on devices, and present more opportunities to serve up advertising, which is Facebook’s main business model. And that presents the biggest obstacle to success for this experiment: Facebook’s objectives and users’ are once again in conflict. Users don’t want more advertising or tracking, and Facebook wants to do more of both."

"This is a great experiment for Facebook – it’s much lower risk than developing a phone or an operating system of its own, and if it turns out not to be successful, there will be little risk or loss to Facebook. If it does turn out to be successful, Facebook can build on the model further and increase the value provided in the application over time. The biggest challenge will be that it can’t replicate this experience on iOS, Windows Phone or BlackBerry, the three other main platforms.

"For carriers, the risk is that this puts Facebook’s communication services front and centre on the device and makes them easier to use and more integrated with the core experience on the device, which should make them easier to use than when they’re buried in an app, and should accelerate the shift from carrier services to over the top (OTT) services. It should be a big boost to Facebook Messenger and the associated voice and video services."

Meanwhile Victor Basta, managing director of Magister Advisors, said: "Facebook’s move is a classic case of ‘out-googling’ Google. By going ‘over the top’ of Google’s prized Android operating system, Facebook is doing to Google exactly what Google did to the Internet, sitting on top of a chaotic system, making it simple and uniform through a proprietary layer, and underpinning this with deep search functionality. In Facebook’s case it happens to be sitting on top of Google’s prized Android OS supported by the depth of Graph Search.

"The clear strategic threat is that it could dramatically reduce the value of Google’s investment in Android, and Google has zero say in this, since unlike Apple, they do not control what happens within the Android eco-system.

"The bigger picture is that Google, Facebook and Apple are now all effectively competing for the same sources of value, and therefore the market valuations of all three companies increasingly represent the ‘pie’ from which each company is taking a slice. In future, what drives Facebook’s valuation up is more likely to drive Google and/or Apple down. This is a three-way fight in which everyone else marginalised.

"Facebook are clearly hell-bent on breaking Google’s hegemony in search through a combination of Graph Search and deeper mobile device integration. What’s interesting and significant about the steps that Facebook are taking with search is that they stem from a behavioural understanding of the user base. Graph Search is powered by the behaviour and choices of "people like us" wherever we are.

"They’ve made a big play today of Chat Head, but what they’re actually talking about is ‘Chat Nav’, which has enormous commercial potential. As communities share views and opinions in new ways it transforms the nature of online commerce. People and interest-based search is emerging as the driver for Facebook’s next $100bn of value."

 

 

 

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