Can’t resist writing about Facebook: Mobile is as mobile does

Alongside all of the media excitement about today’s Facebook IPO, there is plenty of concern about the company’s ability to deliver profits that will justify its new valuation, especially as more of its eyeballs are coming from mobile devices instead of desktop computers. Facebook itself identified this risk in its SEC filing, noting that its mobile software currently generates no “meaningful revenue.”

The challenge of mobile devices to the Facebook revenue model is clear. At the simplest level, mobile device screens are just smaller than desktop screens, which means it’s harder to show ads to users on a web site without blocking their view of their friends’ updates. In addition, the Facebook mobile app for iPhone, according to Bloomberg’s Tech Blog, doesn’t show any ads at all, meaning even less money for Mr. Zuckerberg and his new eager shareholders.

I don’t think this is a case of Facebook not “getting” mobile, as Nick Bilton from the New York Times recently concluded. Facebook clearly “gets” mobile technology, and has famously developed a flexible and efficient strategy for delivering the Facebook experience on the web to almost every mobile device on the planet. What they (and many other companies) haven’t “got” yet is how to make money from mobile technology.

As we learned in the last tech bubble, it’s surprisingly hard to turn eyeballs into cash. For example, there’s this suggestion from ReadWriteMobile, for “location-aware push notification based on your interest graph”:

For instance, I like sports, I am passing a sports bar that is offering happy-hour specials, I get a push notification. Facebook makes money, the location makes money, I get beer. Everyone is happy. 

Of course (as someone close to me has observed), the sports bar could just put a sign in the window advertising the happy hour. Much simpler (and probably cheaper).

Whatever the logic of this sort of solution, I expect to see lots of experiments like this from Zuckerberg & co. in the weeks and months to come. Should be interesting…


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s