Facebook's aggressive approach to solving its mobile problem
The social network knows that if it can't get its mobile act together, revenue may well take a hit. So it's busting out the wallet to scoop up talent and technologies.
Facebook knows mobile is its Achilles' heel, but I didn't expect the company to take such aggressive actions to solve its mobile problem.
The social network admitted to the weakness earlier this month when it amended its IPO filing. "If users increasingly access Facebook mobile products as a substitute for access through personal computers, and if we are unable to successfully implement monetization strategies for our mobile users, or if we incur excessive expenses in this effort, our financial performance and ability to grow revenue would be negatively affected," the company explained in its amended S1.
Facebook isn't currently monetizing its mobile users though advertising. The social network doesn't want to risk upsetting people with Ford Fusion video ads that interrupt the user experience (sorry to pick on you, Ford). Mobile advertising is still in its infancy (just ask Apple), and Facebook still needs to do a lot of experimentation with location-based advertising before it can start churning a profit from mobile.
The company is moving like The Flash to address these issues, though. And it's becoming clear that the social network intends to use its newly minted billions in IPO cash to solve its mobile problem.
Today of all days, Facebook acquired Karma, a beautiful mobile app for giving gifts. Founders Lee Linden and Ben Lewis proved that they understand mobile with their previous company TapJoy, which was acquired by Offerpal in 2010. It's the type of talent Facebook needs right now.
Karma is the fifth mobile startup Facebook has acquired this year alone. So far, it's bought Karma, TagTile (a mobile loyalty platform), Lightbox (an Android photo app), Glancee (a social discovery app), and of course, Instagram. And don't forget that Facebook nearly acquired Kevin Rose's mobile dev lab Milk, but lost a bidding war with Google.
I predict there will be many more mobile acquisitions in Facebook's future. It wasn't built as a mobile-first company, and it's becoming increasingly clear that it needs top-notch mobile talent if it's to fend off upstarts like Path and Instagram. Facebook seems to have decided that if it can't recruit mobile talent, it will simply have to acquire it. It's an expensive and aggressive way for Facebook to address its mobile problem.
If you can't beat them, buy them!