Facebook's Mobile Challenge Part I: Making Money Discussion

[Andy Patrizio]

Facebook's recent IPO made it official: this giant of social networking has no idea how to make money off smartphone users. And this is something the company is going to have to figure out to stay on top.

Read the full content of this Article: Facebook's Mobile Challenge Part I: Making Money

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[Mitlov]

Why can't they just put a banner ad at the bottom of the mobile app? My New York Times app has a banner ad at the bottom (offensive as hell because I already pay $180/year for the subscription). Other free apps are ad-supported in one way or another. And if it's a free service, like Facebook, I don't object to there being an ad there.

[Varjak]

I too find the 'problem' a bit puzzling. I also don't think it's their primary problem (even though it's gotten the most press). GM abandoned FB ENTIRELY for advertising. Plus, even with the advertising it has, it no where near justifies its multiple.

[Adama D. Brown]

Why can't they just put a banner ad at the bottom of the mobile app? My New York Times app has a banner ad at the bottom (offensive as hell because I already pay $180/year for the subscription). Other free apps are ad-supported in one way or another. And if it's a free service, like Facebook, I don't object to there being an ad there.

I think that it has more to do with the way that Facebook has created an advertising model which is now turning around to bite them in the ass. A big part of their pitch to advertisers is and always has been being able to advertise to very specific niches, by analyzing "liked" pages and activities. In essence, that's how they ended up receiving such an inflated estimation of worth: 900 million users and, supposedly, holding the future of targeted advertising by directly looking at what you like and don't like, tailoring both the ad subject and the ad itself to the personal tastes of the user.

Unfortunately, that hasn't worked out as well for them as they'd hoped, as evidenced by GM's dropping them and their own revenues. Social networking users are harder to monetize than they thought, and that is doubly true on the mobile level where people are even less likely to click on ads.

So yes, they could simply put a banner ad at the bottom of their app and call it a day. And they'd probably make a nice healthy amount of money off of it. But it would undermine their own case for being a $100 billion dollar company (or now, a $60 billion dollar and dropping company). Which, to tell the truth, they really aren't. Facebook's value has always been greatly overestimated simply because it's popular. And they can make plenty of money off of basic advertising. But I don't really foresee a long term valuation above, say, $10 billion. Facebook needs to learn that they're essentially a service site, and probably aren't going to be a big player outside of social networking.

[Mitlov]

No argument here that FB's value has been overestimated. I use it a ton, and I like it better than Twitter or Google+ (not to mention MySpace...anyone else remember that place?), but it's not like Mark Zuckerberg invented the internet or the cure for cancer or something. All this talk of FB launching its own phone hardware, buying up its own search engine, etc...it's overkill.

[Drillbit]

Facebook has too much clutter for me and the levels of engagement is poor. My time lines in Twitter and Google+ is much more interesting. Clue: Most friends and relatives in real life don't make the best online posters if they bother at all.

Low ratings in both the Apple App Store and Google Play suggest people think the mobile apps are crap too. Indeed they tend to be, as I tend to prefer using Friendcaster for Facebook or use an overlay like HTC Sense, which has a widget and app browse through Facebook lines.

[Mitlov]

The WP7 facebook app is also awful. I can go into the "me" and "people" hubs, check my FB notifications and my newsfeed, and get back to the homescreen before the FB app would have even loaded my newsfeed.

Furthermore, the WP7 facebook app doesn't block facebook apps from your feed even if you've blocked them on a computer. So hope you enjoy scrolling through Farmville et al. to get to the posts you care about. (the "people" hub doesn't display automatic posts by fb apps, just actual posts typed by your actual friends, which is a much more enjoyable experience).

G+ had promise but never reached a critical mass of users. I had two posts in my feed in the past week on google+. So I stick with FB and Twitter.

[Drillbit]

You followed the wrong persons. I got over 3800 followers in Google+ and get new ones every day, and my daily responses to my posts number the dozens. Google+ is like Twitter --- it matters who you follow first. Beware though, don't treat and post to Google+ like Facebook. There is generally a much higher geek-intellectual-activist-artist-photographer quotient here. Einstein trends here, not Justin Bieber, who accounts for 3% of Twitter's server power.

Some blogger suggested that the horror in Facebook mobile apps is deliberate so people are herded to use the website. Which I almost never use frankly.

[Mitlov]

You followed the wrong persons. I got over 3800 followers in Google+ and get new ones every day, and my daily responses to my posts number the dozens. Google+ is like Twitter --- it matters who you follow first. Beware though, don't treat and post to Google+ like Facebook. There is generally a much higher geek-intellectual-activist-artist-photographer quotient here. Einstein trends here, not Justin Bieber, who accounts for 3% of Twitter's server power.

I use social networking to keep in touch with people I know, not to follow celebrities (one exception: US Olympic fencing ). I have 330ish friends on FB, at least a third of whom post regularly. High school and college and law school friends. I have about 25 people on my G+ circles, two of whom still post regularly.

I think if you work in certain tech fields, all your friends are on G+...but it's failed to attract much of anyone else. I'd agree on the "geek" characterization of G+, it definitely is the social network of choice for people who like Linux, but the "intellectuals" and "artists" I know are primarily on FB, and the "activists" I know tend to split their time between Twitter and FB.

[Varjak]

Adama, excellently expressed.