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Can Facebook make mobile OS click in the bling? | Deal Insight

Facebook recently filed in its S1 statements that it does not control the appearance and presentation of its web on mobile and does not control innovation in the mobile OS space as a key risk factor. However, it finally seems to have won over the OS and well in time for the IPO POP probaibility to go to the right on the slider scale, looking at the 60 million iPad devices already int he market and probably half the smartphones out there. That is one very big red mark off Sheryl Snadberg’s desk as Facebook probably grows advertising revenues to faster than the Zynga and other gaming revenues it receives ( which do support mobile payments)

Facebook user growth and engagement on mobile devices depend upon effective operation with mobile operating systems, networks, and standards that we do not control.

425 million users logon to Facebook on mobile in a month. Even though the entire digital advertising universe is possibly less than $80 bln and even if Facebook reaches 20% of that or $16 bln it would have a foreseen limit on its advertising revenues overall. Further the mobile ad market opportunity will possibly be around $16 to $20 bln currently though growing at a 20% CAGR or whatever rate you believe a 25% faster clip than the traditional platforms.

Zynga offerings on iPad already attract high ratings from more than 2 million daily users and other social gaming platforms also as Facebook mentions may not want to be wed to the Facebook platform esp for advertising revenues that can accrue to them. Also, the limited success of Twitter is a fair warning sign for those who believe in this digital growth stretching oto an eternity, you could be the happiest in this world without making a single real dollar.

Facebook is using the interaction and engagement of the platform in social events created hopefully successfully using its interoperabilitywith most OS’ with a rather long ranged “Sponsored Stories” platform that highlights stories. Many already cried foul to the new desktop interface esp as it interferes with apps on fact of refreshing and otherwise cluttering visual layout and / or system memory layout for Facebook. Mobile devices would need even more careful handling , anathema to Facebook’s “The Hacker Way” phiosophy of not having achieved anything unless you have broken something, which also feeds users’ aspirations and any failure may snowball on Facebook and its listed stock very fast, unlike erstwhile auctioneers and booksellers who had to roll innovation and (if any) privacy policy just once a year to survive.

For Facebook’s first $10 bln in revenue likely in just 18 months, one probably looks at ways in which mobile Asds can catch up with the $1 bln contribution from Zynga and social gaming platforms, but one wonders if that will be too ambitious a target for Zuck’s nerds.

Of course, users are going to disregard all those challenges and find a way to get stuck with Facebook. and that also means this platform can probably charge usurius per click rates even if one does not use its targeted advertising features, and that is the fun of discovering the right digital investment in the cloud!

Zuckerberg’s 57% investment matters only in being the bedrock for the investment much like Jeff Bezos at Amazon and Sergey Brin and Larry Page at Google even as the downwind whiff of air is for Facebook and likely against the 2004 pioneer who took the internet by storm

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This entry was posted on February 6, 2012 by in Financial Markets and tagged , , , , , , , .


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