In light of the fact that most Facebook users are accessing their accounts through the use of their smartphones, Facebook decided that in order to capitalize on this trend and have advertisers pay more they will create an app called Home to better integrate Facebook on smartphones.
Essentially the app will be based on Google’s Android operating system acting as a sort of layer on top of your smartphones system that will keep users engaged longer and make what they do easier such as posting status updates, pictures or messaging. They decided to choose Android for its open system platform as Apple most likely want to keep their eco-system closed.
While it is true that Mark Zuckerberg said that there was no plan to make a Facebook phone, in some sense it is in fact a Facebook phone, but he’s taken the risk out of the equation by just developing the software because if they were to come out with their own smartphones, the success would be dependent on their ability to sell them and in today’s climate the only ones making real money is Apple and Samsung. The app called Home will be available on Samsung and HTC smartphones starting April 12.
However despite this shrewd move, Facebook is doomed to fail as this endeavor will not help them make more money. We have said in the past it’s all about intention and while Facebook’s intention is to make more money off their users on the mobile platform, there are essentially two problems with this notion: first the ads are too small even with the bigger screen size hitting five inches and second people’s primary reason to use Facebook is not to be sold to, but to engage one another in social relationships.
Even with over a billion users, advertisers should not salivate as we have seen time and time again that intention is the key here and they should not waste their money on this unproven concept. The only company that has done this well is Google with their Adwords program. Unlike Facebook working on a hunch, Google is smart and methodological by continuously gathering data to really dig deep into the psyche of their users that they are able to target ads that are truly relevant and create a buy scenario.
Facebook can make money, but not through advertisers leveraging ads on smartphones. The community of users is so large that the potential for other services are there, but they just have to figure what are these services that their users want.