Emerging Platforms

Facebook and it's mobile dominance

Posted by Roger Welch on March 8th, 2012 at 11:38 am

Facebook's SEC filing yesterday contained a lot of interesting information but to me the line that stood out the most was:

Growth in use of Facebook through our mobile products, where our ability to monetize is unproven, as a substitute for use on personal computers may negatively affect our revenue and financial results.

The growth they're referring to is the 432 million people that utilized Facebook on a mobile device in December of 2011...a 76% increase over December of 2010.  Thats a powerful set of numbers when you think about it from a pure growth rate and specifically that its occurring via the global user base.  Thanks to Facebooks acquisition of Snaptu last year, their foray into the mobile space isn't restricted to just smartphones but over 2500 different types of feature phones as well.  That seems to be where their forward thinking may have hit a snag.

Maybe they didn't expect quite the growth rate they've accomplished or maybe they're just like the rest of us that are still trying to find out how best to monetize within a very personal environment.  The mobile device is ubiquitous and that is what entices marketeers...but the reason its everywhere is its considered by most people to be a very personal device.  The three things most Americans don't leave the house without are keys, a wallet/purse, and a mobile phone...and the mobile phone is soon going to replace keys and replace wallets.  The last thing they want is to see too many advertisements or third party interruptions get delivered on that very same device.  Which leads me to the next bit of interesting information in the Facebook SEC filing:

We have historically not shown ads to users accessing Facebook through mobile apps or our mobile website. In February 2012, we announced plans to include sponsored stories in users’ mobile News Feeds. However, we do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven.

58 million people used Facebook exclusively through the mobile application and yet they managed to generate no meaningful revenue from that usage.  Given the shift in consumers from a desktop/fixed environment to a more mobile, transient one you can bet that Facebook and others will figure out how to monetize the space effectively...but until they do, you can bet there's going to be some missteps and some consumer blow back.  I'm looking forward to the innovation that's yet to come in the mobile payment, mobile marketing and mobile social space and I hope you all enjoy the ride as much as I have.

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