Computers

Finding mobile strategy key to Facebook’s success

June 4, 2012 

I’ve heard Facebook’s initial public offering described in colorful ways, some of which aren’t printable in a family newspaper. One thing’s for sure: Whether the stock’s awkward plunge into the deep waters of NASDAQ was botched by Facebook’s boosting the price and number of shares in the $16 billion IPO, or by technical problems at the exchange, or by underwriter Morgan Stanley, the company needs a sound strategy moving forward. That strategy has to involve mobile devices, and it may stretch Facebook’s creativity to the breaking point.

Clues about the very challenging year ahead are all over the place, beginning with Facebook’s acquisition of an app for sharing photographs called Instagram. Mark Zuckerberg’s firm paid $1 billion for Instagram in April, no doubt motivated by the fact that users were flocking to the product, which originally supported only the iPhone but reached the 50 million download mark after its release on the competing Android platform. Instagram lets you display, manage and comment on photos from your smartphone, and it looks like it would be a better photo browsing choice – certainly a simpler one – than managing photos within Facebook itself on a PC.

Scrambling on mobile

But it’s worth noting that what Facebook released in late May was not Instagram but a separate app called Facebook Camera. Like Instagram, it’s a standalone application, and it plays to an activity – sharing photos – that is one of the largest user activities on the social networking site. Facebook Camera is smooth and fast, but why is Facebook now the owner of two apps that do the same thing, one of them developed in-house? The move looks like an attempt to pre-empt Instagram’s takeover of the mobile photo market by acquiring its entire user base, and we’ll see how well Facebook manages to bring the best of both apps together in later versions.

The Instagram buy shows us that Facebook is scrambling for a mobile strategy and in the process confusing both the market and itself. We now hear that the company is hiring former Apple iPhone engineers, and rumors are flying that it plans to build a smartphone, thereby moving into the hardware business. Such a move would bring Facebook into direct competition with Apple, not to mention the millions of devices running Google’s Android operating system. Given the number of phones now available – and the woes of former heavyweights like Research in Motion and Nokia – is there any compelling reason for a separate Facebook phone?

Competitive terrain

If the rumors are exaggerated and Facebook is just looking for a partnership with an existing hardware maker, the same question arises: Why play on this turf at all? What Facebook offers that resonates with its users is the social networking experience, the so-called “social graph.” Surely app-building, even if clumsily handled as with Facebook Camera and Instagram, is a better approach than nudging into terrain that would demand not just good phones but cheap ones, thus driving down profit margins. A Facebook phone would meet no specific market need and place Zuckerberg and crew toe to toe against the white-hot juggernaut of Apple, not to mention Google, which just completed the acquisition of hardware maker Motorola Mobility.

Make no mistake, Facebook realizes it has to get the mobile experience right, and cooler heads may realize the best way to move forward isn’t through hardware but software, focusing on the core Facebook experience. Rumors are now flying that the company will buy Norwegian browser maker Opera, which produces the highly regarded Opera Mini along with its full-size browser offering. Facebook needs Opera Mini because putting the link-heavy Facebook home page into a smartphone screen is no easy matter, and Opera’s talented team has demonstrated it knows the ropes when it comes to a feature-rich yet uncluttered screen experience.

There have been attempts to create a browser for the social graph, but the market gap right now is a mobile browser that can translate the Facebook experience to a phone. That’s a software, not a hardware, challenge, and the sooner Facebook tackles it, the better for its shareholders.

Paul A. Gilster is the author of several books on technology. Reach him at gilster@mindspring.com.

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