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Facebook IPO Raises The Question:
Will Facebook Adapt to Mobile,
or will Mobile Adapt to Facebook?

facebook-1-billion.gifYesterday Facebook‘s IPO valued the company at over $100 billion, the third largest IPO is US history.

Now that Facebook is a publicly traded company, there has been a lot of analysis about Facebook’s business prospects. With an increasing percentage of people accessing Facebook over mobile, and with advertising being the majority of Facebook’s revenues, clearly the topic of how Facebook will fare in mobile advertising is worth examining.

Kevin Fitchard has posted an interesting article on GigaOm which argues that Facebook cannot simply build a mobile ad business, it must actually help develop and change the overall industry if it is to be successful.

A quick look at the numbers shows how significant Facebook may become to mobile:

  • total mobile ad revenues in 2011 were probably around between $3.5 and $4 billion
  • Facebook’s ad revenues in 2011 were just over $3 billion
  • over half of Facebook’s active users access Facebook at least part of the time over mobile, where there are currently no ads.

So clearly if Facebook can manage to replicate their web advertising success over mobile, it will represent a very large part of the total mobile advertising industry.

At the moment, most of the mobile users also use the web version and so they do contribute to Facebook’s advertising business. However, it seems there is a certain percentage, about 10%, that use mobile exclusively. And as Facebook expands beyond the more westernized countries into “mobile only” areas such as India or Africa, this percentage is likely to grow.

facebook-logo.gifWhat is not yet clear is how Facebook can replicate web advertising success on mobile. Given the inherent strengths and limitations of mobile, just porting a web strategy to mobile is unlikely to prove widely successful.

Formulating an effective strategy to address this issue may well be the key to Facebook’s continued success.

Read the full article on GigaOm.


19.05.2012    Tags: ,
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