Wednesday, April 03, 2013

That's no moon, it's a space station!

Get ready for the lame stream media (I know I shouldn't but I couldn't resist) to get everything wrong again when Facebook announces its new smartphone app/OS on Thursday. There will be talk about mobile migration, screen real estate and less intrusive/more useful advertising. Nothing you have not heard a billion times before because the people who tend to get invited to the swish corporate events where these things are announced are apparently incapable of looking beyond what you put in front of their face.

The British press, in particular, does not seem to have yet got to grips with the fact that Silicon Valley companies THINK BIG! So let's try it: Facebook is moving into the mobile telecoms space as part of a grand plan to become a carrier. That's right, it's going to side step the entire mobile phones war sideshow by making the OS an irrelevance.

The clues are all there if one knows where to look. Namely: Africa. There are already more than 500 million mobile phone subscriptions in Africa. More than 40 percent of Kenyan GDP flows through a mobile money service called M-Pesa (owned by Vodaphone). And by far the most important mobile brands are Facebook, Google, Nokia and the Chinese network vendor and consumer electronics giant Huawei.

Facebook already subsidises smartphone sales in Africa by paying carriers to provide Facebook for free on select handsets and data packages. Don't send a text or SMS, use Facebook to send the same message for free. Of course, in order for consumers to take advantage of this offer, individuals and their friends must first join Facebook. This has helped to generate enormous goodwill and brand value that will make the switch to fully fledged carrier service seem trivial. If all of your most important communications are already routed via Facebook, why not place it at the centre of your entire information ecosystem?

Meanwhile, Facebook has co-hosting deals with several of the largest local data centre and Cloud service providers capable of storing up-to-date versions of all the most visited websites (besides Facebook) in a local cache, thereby easing congestion on the long fibres that provide the only reliable connection to these rapidly emerging economies while also cutting the cost of terminating international traffic. In other words, Facebook already makes the entire 'Internet experience' available to many African consumers at a fraction of the price and with superior quality of service than any locally based alternative. Even if this involves a small subsidy over the longer term, Facebook will still be able to hoover up all that lovely consumer data shareholders seem to value so highly (why else do they keep buying stock?)

Still not convinced? Okay, Facebook has been working closely with Microsoft for several years now. Facebook is integrated into the latest Windows mobile OS in a very clever way. It is also integrated into the latest version of Office - Word, Excel, Access. Meanwhile, a couple of years ago Microsoft bought an IP telephony service you may have heard of called Skype, which is also starting to interact with Facebook in interesting ways. Now are you beginning to see the possibilities? Don't think OS or App Store (those can come later), Zuckerberg is thinking much, much bigger: the entire Web inside a Facebook homepage, accessible via multiple devices and software platforms, with Facebook in the background running big data analytics and plotting to take over the world!