Yesterday, as the Mobile World Congress’ Keynote Speaker, Facebook CTO Bret Taylor laid out the company’s plans to “help” the mobile industry and developers work around the pesky control that Apple and Google now share. While unveiling two key programs that Facebook is looking to lead, he addressed Facebook’s plans to tackle both the in-app purchasing and the setting of HTML5 development standards and guidelines. Looking at both, they could be seen as either a uniting of factions to create a better mobile experience for all, or an end run at increasing the company’s power and market share.
To be fair, the move does seem like a win for Telcos – who were left out of the app monetization scheme by Apple and Google – and App developers – who have to go through heavy testing phases to ensure their product work across the wide range of systems and hardware. But, it seems that Facebook’s real goal is to enable themselves to make more money in the long-term. And that’s not a bad thing – just a worrisome one.
First off, the changes to in-app purchasing are much-needed and could benefit users as much as the telcos (and Facebook) it will most likely support financially. I question what Facebook’s role is in finding that solution. Don’t they already have a monetization model via Facebook credits? As more of their business moves to mobile and the subsequent ad revenue opportunities are diminished in the mobile experience, it is unclear what they will be able to garner from this immediate development. It does look like they will be able to offer the Telcos a piece of the revenue pie by reaching the umpteen million Facebook users, but their ultimate upside for Facebook will be that they are now playing in the same 30% playground that Apple and Google control.
The other part of Taylor’s address was related to general Mobile Web standards. There is an obvious need to come to some general standards and Facebook has the weight behind it to lead other publishers and developers in that quest. If they are putting together a consortium, hopefully it will be more effective than the ones we’ve seen in the entertainment industry (that come together to then decide they are going to do things their own way.) If they are building technology – specifically the Ringmark product they announced for testing purposes – as an infiltration tool (think back to those AOL CDs that came in the mail to get users to join) things could possibly get messy. Developers will be keen on tapping into Facebook’s Open Graph, but will it help those same developers with other testing that might have nothing to do with Facebook? If it is too narrow, it could end up being counter-productive.
It is far too soon to tell which way this will go, but my initial reaction was one of concern. That concern is based on the confusion about whether the company is facilitating the consortium or leading it. They are certainly in the position to facilitate the connection of many companies to reach a higher (and competitive) good. My concern is that it seems that they are actually looking to extend their fingers beyond their core to generate an even further stake in the digital realm. The positioning as an alternative to Apple and Google is a noble business decision, but will it spread them too thin? Also, if they are leading the charge and bringing on partners to do a bunch of dirty work that might show those companies an up-side in the short-term for Facebook’s further domination in the long-term, that could be a cause for concern.
Of course, there is not anything “evil” in either case – it just seems like it could end up being dubious. Or, perhaps I’m too fixated on an “Evil Empire” narrative of some sort.