Startups Beware
Published in Globes
(Israel) on 19 June 2012
by Roy Goldenberg (link to original)
Buying the Israeli website face.com proves that Facebook adheres to its mobile strategy. A moment before last month's IPO, the social network warned the potential investors, explaining that while around half of its users connect Facebook through mobile phones or tablets, the company itself has no true capability of creating money from this traffic.
Facebook has since then buckled down, presented a mobile-oriented advertising system, and begun a session of related acquisitions. The most famous one is the acquisition of the photo application Instagram, with its tens of millions of users, for which Facebook paid a billion dollars. Concurrently, the company made several additional mobile-related acquisitions, such as the photo sharing company Lightbox, the loyalty application Tagtile, and even the location-based service Gowalla.*
Facebook's goal is clear and immediate: find a way to become mobile. It seems indeed that it woke up too late, just a moment before the IPO, but Mark Zuckerberg and his colleagues are doing everything to enjoy the mobile traffic. Yesterday, it was already reported about its intention to integrate location-based advertisement for its application users, seeking to create true monetization for use during movement.
The face.com deal is another step on the promising path to mobile profits. The company's launching of its own iPhone application that recognizes Facebook friends before the phone's “shoot” button has been pressed made Facebook even more hungry for the Israeli technology.
The immediate predictions suggest that face.com's facial recognition technology would be directly combined with Facebook's own photo shooting application, with the possibility of combining it with Instagram. However, the economic potential is wider and may even allow the company to give facial features-based advertising, such as advertisements for men over 40 or women below 25. In such conditions, the advertisers' segmentation ability would grow and would allow possibilities that the rivals don't have today.
One way or another, the fact that more and more people will soon use Facebook with their mobile devices will only strengthen the social network's focus on this field. In other words, face.com is not Facebook's last mobile-world acquisition.
*Translator’s note: the latter was actually acquired long before the IPO and Instagram's acquisition, in December 2011
Facebook has since then buckled down, presented a mobile-oriented advertising system, and begun a session of related acquisitions. The most famous one is the acquisition of the photo application Instagram, with its tens of millions of users, for which Facebook paid a billion dollars. Concurrently, the company made several additional mobile-related acquisitions, such as the photo sharing company Lightbox, the loyalty application Tagtile, and even the location-based service Gowalla.*
Facebook's goal is clear and immediate: find a way to become mobile. It seems indeed that it woke up too late, just a moment before the IPO, but Mark Zuckerberg and his colleagues are doing everything to enjoy the mobile traffic. Yesterday, it was already reported about its intention to integrate location-based advertisement for its application users, seeking to create true monetization for use during movement.
The face.com deal is another step on the promising path to mobile profits. The company's launching of its own iPhone application that recognizes Facebook friends before the phone's “shoot” button has been pressed made Facebook even more hungry for the Israeli technology.
The immediate predictions suggest that face.com's facial recognition technology would be directly combined with Facebook's own photo shooting application, with the possibility of combining it with Instagram. However, the economic potential is wider and may even allow the company to give facial features-based advertising, such as advertisements for men over 40 or women below 25. In such conditions, the advertisers' segmentation ability would grow and would allow possibilities that the rivals don't have today.
One way or another, the fact that more and more people will soon use Facebook with their mobile devices will only strengthen the social network's focus on this field. In other words, face.com is not Facebook's last mobile-world acquisition.
*Translator’s note: the latter was actually acquired long before the IPO and Instagram's acquisition, in December 2011