A Home run for Facebook?


Yesterday, Facebook unveiled its ‘Facebook phone’. Rather than manufacturing a physical handset, instead Facebook is hijacking the everyday Android smartphone with a clever piece of software (a ‘Launcher’) which turns it into an always-connected Facebook device.

Called Facebook Home, once installed it appears on the home screen of any Android device, and consists of a collection of apps designed around people’s Facebook connections. It’s incredibly visual compared with what people will be used to. Rather than being greeted with a set of apps when they turn on their phone, instead Home will feed through photos and updates from the user’s Facebook feed. This is part of Zuckerberg’s vision to design a phone “around people and not apps” – producing a “great social phone”.

It’s a major move by Facebook and one that makes a lot of commercial sense. Smartphones and social networks are becoming increasingly synonymous and weaving Facebook even further into the experience makes sense from this perspective. People are spending more and more time on their mobiles and of course, Facebook wants this time to be theirs.

More eyeballs on Facebook means more potential for revenue generation, and with over 680m people checking the platform on their mobile every month, it’s clearly an area where there’s more advertising growth to come. And where are these opportunities? While Zuckerberg wasn’t entirely specific about how brands and advertising would be affected by Facebook Home, the highly filtered Cover Feed could offer an opportunity for news feed advertising at a premium over Facebook’s existing offering.

More than that obvious development, as I told Adweek, Facebook Home could be the holy grail of mobile advertising. Aside from mobile operators, no other company is able to keep track of a consumer’s location at all times – which, privacy settings permitting, Facebook could now do with Home.

And the new in-build Chat Heads and notifications features provide a potential mechanism to allow location-based ads to appear in a relatively unobtrusive way – something the mobile operators don’t have. If Facebook can use this to deliver location relevant and timely commercial messages to consumers, it will effectively give Facebook a licence to print money – their long sought after equivalent of Google’s AdWords.

Facebook could potentially take it even further. As Om Malik wrote yesterday:

It can start to correlate all of your relationships, all of the places you shop, all of the restaurants you dine in and other such data. The data from accelerometer inside your phone could tell it if you are walking, running or driving.

This is the third big announcement we’ve seen from Facebook recently, hot on the heels of Graph Search and changes to the newsfeed, but this has the potential to be the biggest game changer yet for the platform.

Whether consumers have the appetite for more Facebook, more of the time will become clear as we watch Home’s performance over the next few months. However, if Facebook has cracked the mobile conundrum, it could now be sitting on a potential goldmine big enough to keep Wall Street happy – at least, for now.

Update: Facebook has released a Q&A trying to reassure critics that any privacy concerns about Home are much ado about nothing, saying:

Home doesn’t change anything related to your privacy settings on Facebook, and your privacy controls work the same with Home as they do everywhere else on Facebook

However, their statement doesn’t exclude the possibility of the sort of location-based ads as I describe above…