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04
May
2012

Mobile gives Facebook the Wow factor

POSTED BY Global Administrator
Facebook has just released a few more details regarding its forthcoming – May 18 – IPO, notably that shares will be priced in the $28-35 range, valuing the company at $85-95 billion.

To which we all say: Wow (or a similar expression denoting amazement and wonderment). Although, in most cases – including that of this blogger – the astonishment and wonderment expressed in the Wow will surely reflect not so much the valuation, but the sheer speed at which Mr Zuckerberg’s social entity has attained these dizzying heights.

I’m on Facebook; on the balance of probability, you are too, since I’m reliably informed that at the end of March I was accompanied by over 900 million other Facebookers. Astonishingly, Facebook is has now passed 500 million mobile users, meaning that very roughly one in ten mobile handsets worldwide is being used to ask where you can get two-metre Venetian blinds; to show me photographs of a schoolfriend I last saw 23 years; to “like for looks” (what on Earth does this mean? My dear 13 year old cousin communicates via Facebook in a combination of peculiar neologisms comprehendable only by other 13 year olds); to allow Peter Gabriel to tell me about his latest concert.

Now, I have never met Peter Gabriel, although I could probably bore you to death by reciting the running order of the tracks on his first five solo albums (“Moribund the Burgomeister”, followed by “Solsbury Hill”, followed by “Excuse Me”, followed by…); if you were still alive at the end of that, I’d finish you off by singing them at you, and I’d be word perfect as well. But what Facebook allows brands to do is to increase their engagement with the consumer, and so Mr Gabriel – as a brand as well as a highly talented musician – can reach out to potentially interested parties (e.g. me) and keep them up to date on his activities (both commercial and charitable), and possibly sell a few albums,  T-shirts and WOMAD tickets along the way.

Last year, Facebook generated just over $3.7 billion in revenues, or just over $4 per active user per year. The general consensus is that, given this vast active user base, all happily uploading photos and worrying about Venetian blinds, it has barely scratched the surface, particularly when the mobile is brought into play. Zuckerberg has been extremely cautious about advertising on the mobile, recognising the very personal nature of the device and the dangers of become too intrusive within an essentially private arena, but – particularly given mobile’s ability not just to target advertising to the individual, but to deliver advertising or “adformation” (location-aware or otherwise) that is useful to that individual – it clearly represents an enormous opportunity. Likewise, social gaming: the Japanese market in particular represents a paradigm to be emulated in the mobile space.

Like I said: it has barely scratched the service. Prepare for a few more Wows.