06 August 2012 · By Otto Sjöberg
The mobile industry’s movers and shakers have been experiencing all the drama of a good roller coaster ride: steep upturns and plunging drops.
Not only does the mobile revolution change our world and our lives, it also decides winners and losers. So it seems.
Looking at the industry’s big players and how they’re doing in the heat of the summer, it’s like watching a roller coaster ride; it’s either steep uphill or steep downhill with few plain passages.
Some ups and downs from the past weeks:
In other industries, it is apparent that your outlook is based on your mobile performance. I think the same applies for the newsmedia industry. You can’t even trust your present digital presence as a guarantee for mobile success.
Look at Facebook: down.
The stock fell like a rock following the social network’s first earnings announcement as a public company, despite reporting a whopping 955 million monthly users (up 29% year-on-year) and US$1.18 billion in revenue (up 32% year-on-year).
The reason: Investors continue to question Facebook’s mobile strategy. Although 543 out of 955 million users now access via mobile devices (up 67%), and ad revenue continues to rise to US$992 million, analysts question why Facebook has not been able to monetise its sizable mobile presence.
The reason: Mobile advertising was just recently introduced and is a tiny fraction of sales.
Co-founder and CEO Mark Zuckerberg, trying to convince investors, didn’t help much:
“On average, mobile users are around 20% more likely to use Facebook on any given day. Facebook is the most used app on basically every mobile platform. So when we think about what we want to do right now, we want to increase the depth of experience in addition to just growing users,” he said.
In the weeks before and after the IPO, the social network accelerated mobile ad efforts.
“I think Facebook is going to have to find a different way to monetise mobile that isn’t about little display ads,” Melissa Parrish, analyst at Forrester Research, told IDG News.
In a recent interview at the Allen & Co. media conference, Zuckerberg admitted his hardest job is figuring out how to adapt to mobile devices. “Bringing Facebook’s features to handheld gadgets is difficult because the user experience is so different than on desktop computers,” he said.
Let’s see if the new R&D centre, soon to open in London and focus on mobile development, will help Facebook crack the challenge. At least it shows Zuckerberg was serious in May, when he said mobile was his “first priority” for 2012.
It’s interesting to compare what Facebook is doing to another giant’s moves — Amazon: up.
Amazon is also opening an R&D hub in London.
“Innovation is part of the Amazon DNA and we are creating a British centre of excellence to design and develop the next generation of TV and film services for a wide range of digital devices,” Paula Byrne, who will head the new centre, said in a statement.
Where Facebook and Amazon seem to part ways in their approaches is in the strategy each is using to evolve its respective ecosystem. Zuckerberg has basically denied Facebook is making its own smartphone, “which wouldn’t make much sense for us to do.”
Rumours of an Amazon smartphone coming up are not being shot down — “not bad for a company that was best known for book, garment, and small appliances deliveries just 12 months ago,” as Wired.com put it:
“An Amazon smartphone would complement the current Amazon ecosystem: All of Amazon’s hardware offerings act as digital storefronts for books, music, movies, and TV shows, and a smartphone tailored to an individual’s unique purchasing habits could be the ultimate vehicle for impulse buys.”
If these giants are putting so much focus on R&D, it ought to be a thing to think about for media companies. With few exceptions, the media industry does not make the necessary effort when it comes to R&D.
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