So here’s the mother of all IPOs then, and it was coming a long way. The web was buzzing, today analysts of any couleur are commenting and reading through the fine print of Facebook’s registration statement (known as the S-1) in order to find valuable nuggets of information that they had not had before and myriads of bloggers and journalists drool over the new wave of young wealthy people in the Valley.
No mobile revenue
Whilst I’d love to join into this frenzy, I want to focus on one point in the S-1 that caught my eye, and which might pose some interesting challenges for the social networking giant going forward, namely the large abyss between mobile use of the site and revenues derived from it. You will likely have read about the huge amount of Facebook users regularly using the site from mobile devices. According to the company itself, 425m active users (out of a user base of 845m) accessed the site using mobile devices; that’s more than 50%. And yet, Facebook does not derive “any meaningful revenue” (quote from their S-1) from it.
Why (these) ads don’t work as well
This is, of course, because it – thus far – did not find a good way to display ads in their various guises to mobile users. The screen real estate is scarce and it would be easy to destroy the user experience by doing so. However, with that growth in usage, they may have to review this approach. The challenge is then to successfully marry user experience on a small(er) screen with revenue-generating activities. And, alas, the latter are so far mainly display ads of various sorts. How successful will those be? My guess is not very much. It is likely one reason why Facebook so far has shied away from using them: it might just destroy the user experience to an extent that its users would be seriously upset.
And yet, it is only the latest case of highlighting one of the common fallacies of migration from web to mobile (and I am not even saying they are wrong to move that way; their user growth and occuption of that space will likely counter-balance that; I think it was Accel’s Rich Wong who said that it is easier to find revenue streams once you have 100′s of millions of users than to find 100′s of millions of users with a (pre-)defined revenue stream). Nevertheless, none of us would watch a TV commercial showing you a static picture and someone reading something out from the off (this is exactly how TV advertising kicked off). We were not overly thrilled by early attempts of online advertising; they were merely an attempt to convert billboards and printed circulars to the digital realm. It was not until Google’s AdWords that online advertising really hit it off. So why would we now be content with a mere port from another form of media?
The Japanese way?
Japan has shown that there are other ways. Japan’s GREE reportedly records similar revenues from about 5% the user base than Facebook does. It does so mainly with virtual currencies and goods (and, yes, it has moved to a slightly different target market); users can customize their experiences within that social network by buying “stuff” to embellish their avatars, play, use, customize content, etc. Japan has always been something of the Galapagos Islands when it comes to mobile usage: what worked there didn’t often work elsewhere (anyone remember i-mode?). However, we are seeing a similar effect on smartphone applications: 65% of the top-grossing apps these days use some sort of “freemium” feature. This approach might be too late for Facebook now though. Its users would be up in arms would they start charging for features that users have come to see as free.
I am fairly confident that the good folks of Facebook are here to stay but I am still thrilled to see if, when and how they will begin to adapt. With all the very smart people in the company, we may just see the next wave of mobile monetization, and I wonder what it might be…
This week’s Carnival of the Mobilists comes to you from Kansas, more specifically from Steven Hoober, and here’s what he has in stock for you:
- Will larger screens lead to poorer mobile web sites?
- Do apps beat browsing?
- What will be the best mobile advertising networks 2012?
- Do QR codes work? Someone had a look at TfL’s (better known as the operator of the London Tube) numbers.
- What can advertisers expect from the Kindle Fire?
- Would you close your business for two days per week? A look at retailers and the benefits of mobile-optimized websites.
- Will Windows Phone 7 be cutting it?
- Android and Apple have not won the smartphone war.
- Have you ever heard of a “wearable computing equation”? Check it out!
- What is the spectrum/bandwith crunch in Boise, Idaho?
- My little piece on the revolutionary (well, perhaps, “only” disruptive) French operator Free.
- Image processing in Generation M
The carnival is live here. Go read! 
A new year, a new carnival (which will returned to weekly editions now, too). This week’s edition is hosted by Mark Bridges over at thefonecast.com, and he includes posts, such as:
- Lots of reminiscing on the past year (on mobile marketing, the greater scope of the mobile landscape and – albeit in Spanish – a reminder of a joke from all the way back in 2004 when someone suggested in April Fools’ fashion that Apple – hold your breath – might launch a phone bypassing traditional network operators).
- Of course some predictions (general ones as well as a look on where mobile development specifically might go) and Tomi Ahonen’s latest on why all roads lead to Mobile (as in tech, not as in Alabama).
- A couple of posts on what might or might not happen to WebOS following HP’s open-sourcing announcement (comparisons to Symbian’s fate included).
- More on dying platforms with a piece on mobile flash.
- Ad performance benchmarking (Admob vs mobfox).
- A call to prepare for the (presumed) ascent of the Kindle Fire.
- And, finally, a nod to my two posts on Angry Birds and my take on the dubious assertion that “social lost its sizzle“.
The carnival is here! Go, read it! And if you’re a blogger wanting to participate, head over to the Carnival’s revamped homepage where you will find everything you need to know about submitting entries and even hosting one on your own blog if you are so inclined.
On 28 and 29 October 2010, Droidcon London will open its doors again, exploring in multiple tracks the Android ecosystem. Business, Developer, Design or SDK/API – there will be something for everyone involved or interested in the fastest growing mobile OS (and associated ecosystems) at the moment.
For the main conference on Friday, the speaker line-up promises a lot of learnings and insights.
I will be there telling people on how to make money on Android (hint: yes, it will involve Scoreloop‘s tools… 
). But you should also come and see great speakers from:
- Admob (yes, I know they’re Google now, too)
- T-Mobile
- InMobi
- comScore
- Sony Ericsson
- Motorola
- Orange
- Reuters
- Qualcomm
- INQ Mobile
- Ericsson
- Accumulate
- Alcatel-Lucent
- Device Anywhere
- and many more (check here for a full list of speakers).
The conference will be preceded by a barcamp on Thursday (28th), which will feature, amongst other things, a Google Android boot camp and dotOpen’s formidable AppCircus.
I am hoping to see you there. Go here to register (or check here for the full programme on Thursday and Friday).
This week’s Carnival of the Mobilists is up and running. It features inter alia:
- a podcast on mobile ticketing;
- a recap of the M-Publishing event organised by the excellent Camerjam guys (which I so sadly missed due to illness);
- an interview with Tomi “Rat Hat” Ahonen on LBS and mobile marketing;
- new research on the growth of mobile data and its impact on the various parts of the value chain;
- Tomi Ahonen’s take on the iPhone 4
- and much, much more.
Oh, and they were also good enough to include my (very) recent post on people-centric design. Thank you.
The carnival is hosted over here and it is – as always really – well worth a read!
