Facebook Tries to Capture Mobile App Market


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Facebook’s new App Center has been the center of quite a bit of buzz this week as Facebook readies its IPO. Before May 9, Facebook had a place you could go to find and download and/or access Facebook Apps—including games, mobile apps, and Facebook-enabled Web sites. Now, Facebook has “launched” an App Center that focuses primarily on mobile apps—those that you can download onto your iPhones or Androids (Blackberry apps are noticeably missing).

Facebook-Open-GraphFacebook-Aware Apps Track Everything. As we cautioned in our whistle-blowing article, Facebook’s Timeline: Seductive and Dangerous, apps that are Facebook-aware are dangerous to your privacy. Everything about you and your friends and your activities can be tracked, analyzed, and viewed.

Why Does Facebook NEED to Know What Mobile Apps You’re Using? It might seem like an innocuous, convenient, and logical next step for Facebook users to look for apps on the Facebook App Center, downloading those their friends like and value based on reviews. And, once you find an app you want, you still go to the Apple App Store to download an iOS app, or to Google Play to download an Android App (note that there are no explicit links to Amazon’s Appstore for Android!). But, in order to be listed (and reviewed) in the Facebook App Center, you need to implement Facebook Connect for your app. That means that users’ activities and their friends’ activities will be tracked and logged. So think twice before you let yourselves be seduced into using Facebook Connected apps.

Facebook Stands to Lose Ad Revenue from Mobile Apps. I like Chris Davies’ analysis of why Facebook made this move, particularly right now in its pre-IPO stage. In a SlashGear post entitled, Facebook counts on App Center to solve mobile crisis, Chris excerpts telling sections from Facebook’s amended SEC Filing:

“Facebook’s IPO roadshow is putting a positive spin on the social network’s potential, but it’s in an amended SEC filing that the company spills its mobile concerns:

‘We believe this increased usage of Facebook on mobile devices has contributed to the recent trend of our daily active users (DAUs) increasing more rapidly than the increase in the number of ads delivered. If users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected’

The company warned of the precarious mobile situation back in February, spilling details of its huge mobile userbase but confirming that it currently has little in the way of monetizing them. In fact, mobile Facebook users grew by 76 percent in 2011 and are expected to continue to increase in 2012. Facebook also namechecked Android and iOS as possible barriers to future profit, should it not manage to cement its position on mobile devices:

‘We are dependent on the interoperability of Facebook with popular mobile operating systems that we do not control, such as Android and iOS, and any changes in such systems that degrade our products’ functionality or give preferential treatment to competitive products could adversely affect Facebook usage on mobile devices’

… .it’s unclear whether acting as a middleman will be sufficient to ride those climbing user numbers to a higher IPO result.”

~ Chris Davies in SlashGear

Bottom line: by throwing a lasso around ALL mobile apps that Facebook users use on any device, Facebook can monitor and monetize users’ activities through targeted advertising. If we all slip into the ether and use apps on our mobile devices that are not Facebook-aware and Facebook-connected, Facebook loses the ability to track our every move and to deliver targeted, location-based ads to us on the go.

Republished with author's permission from original post.

Patricia Seybold
With 30 years of experience consulting to customer-centric executives in technology-aggressive businesses across many industries, Patricia Seybold is a visionary thought leader with the unique ability to spot the impact that technology enablement and customer behavior will have on business trends very early. Seybold provides customer-centric executives within Fortune 1 companies with strategic insights, technology guidance, and best practices.


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