:: Facebook challenge: Cashing in on mobile devices ::
Lots of people love their cellphones. Facebook, so far, is not a big fan. Amid the jaw-dropping financial figures the company revealed last week when it filed for a public offering was an interesting admission. Although more than half of its 845 million members log into Facebook on a mobile device, the company has not yet found a way to make real money from that use. "We do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven," the company said in its review of the risks it faces. In a world that is rapidly moving toward an era of mobile computing, this is a troubling issue for Silicon Valley's brightest star - particularly since much of Facebook's growth right now is in countries like Chile, Turkey, Venezuela and Brazil, where people largely have access to the Internet using cellphones. Facebook is not the only company struggling to translate the success of its website to mobile devices, where screen space is at a premium and people have little patience for clutter or slow loading times. It is a problem that plagues companies as diverse as news publishers and the streaming radio service Pandora, and it is likely to loom larger. There were more global shipments of smartphones than of personal computers in 2011, according to a recent report from Canalys, a research firm. But the issue seems particularly urgent in the case of Facebook, which is wildly popular among its users and is seen as a company of the future, a hybrid of social hub and information conduit, platform and publisher. In other words, if Facebook cannot figure it out, who can?
Facebook brings in most of its revenue by selling space on its website to advertisers who want to reach its users. Overall spending on mobile advertising in the United States is expected to reach $2.6 billion this year, up 80 percent from $1.45 billion in 2011, according to research by eMarketer. But that will still be just a sliver of what is likely to be a $39.5 billion online advertising market. Google, a Facebook competitor on the Web, was the biggest player in the mobile ad market last year with about $750 million in revenue, and Apple came in second with more than $90 million, eMarketer says. "It's still immature when compared to online, print and TV advertising," said Noah Elkin, an analyst with eMarketer. "But it's growing at a faster pace, even though its revenues are still dwarfed by the other formats."
If Facebook were to bring Zynga's games to its iPhone and iPad apps, for example, it would have to share that revenue with Apple, which requires app makers to hand over 30 percent of their proceeds. Google puts no such restrictions on apps for devices running its Android software, but given the increasing rivalry between Facebook and Google in social networking, Facebook is not in full control of its destiny there either.
Source - Gesia
:: Facebook challenge: Cashing in on mobile devices :: Lots of people love their cellphones. Facebook, so far, is not a big fan. Amid the jaw-dropping financial figures the company revealed last week when it filed for a public offering was an interesting admission. Although more than half of its 845 million members log into Facebook on a mobile device, the company has not yet found a way to make real money from that use. "We do not currently directly generate any meaningful revenue from the use of Facebook mobile products, and our ability to do so successfully is unproven," the company said in its review of the risks it faces. In a world that is rapidly moving toward an era of mobile computing, this is a troubling issue for Silicon Valley's brightest star - particularly since much of Facebook's growth right now is in countries like Chile, Turkey, Venezuela and Brazil, where people largely have access to the Internet using cellphones. Facebook is not the only company struggling to translate the success of its website to mobile devices, where screen space is at a premium and people have little patience for clutter or slow loading times. It is a problem that plagues companies as diverse as news publishers and the streaming radio service Pandora, and it is likely to loom larger. There were more global shipments of smartphones than of personal computers in 2011, according to a recent report from Canalys, a research firm. But the issue seems particularly urgent in the case of Facebook, which is wildly popular among its users and is seen as a company of the future, a hybrid of social hub and information conduit, platform and publisher. In other words, if Facebook cannot figure it out, who can? Facebook brings in most of its revenue by selling space on its website to advertisers who want to reach its users. Overall spending on mobile advertising in the United States is expected to reach $2.6 billion this year, up 80 percent from $1.45 billion in 2011, according to research by eMarketer. But that will still be just a sliver of what is likely to be a $39.5 billion online advertising market. Google, a Facebook competitor on the Web, was the biggest player in the mobile ad market last year with about $750 million in revenue, and Apple came in second with more than $90 million, eMarketer says. "It's still immature when compared to online, print and TV advertising," said Noah Elkin, an analyst with eMarketer. "But it's growing at a faster pace, even though its revenues are still dwarfed by the other formats." If Facebook were to bring Zynga's games to its iPhone and iPad apps, for example, it would have to share that revenue with Apple, which requires app makers to hand over 30 percent of their proceeds. Google puts no such restrictions on apps for devices running its Android software, but given the increasing rivalry between Facebook and Google in social networking, Facebook is not in full control of its destiny there either. Source - Gesia
