Facebook’s Mobile Transformation Needs To Happen Now

Facebook Inc (NASDAQ:FB), the largest Social networking site, will re-engineer itself into the mobile business to regain the status of a ‘$100 billion company’. This change is the need of the hour for Facebook.

Facebook's Mobile Transformation Needs To Happen Now

There was a time when Facebook focused more on its desktop business over  its mobile segment. A handful of engineers used to handle the operations in the mobile segment. However, Facebook Mobile app was quite popular on Apple Inc. (NASDAQ:AAPL)’s iPhone, but users complained the software was not fast enough and crashed often.

Mark Zuckerberg realized in 2011 that the assumption of Facebook Inc (NASDAQ:FB) was miscalculated and that the growing number of subscribers was inclined towards its mobile app rather than desktop. This fact was very much evident from the Facebook’s own data. Also, with the popular mobile apps, start-up companies like Instagram were also setting tough challenges for Facebook.

“If we are going to be a mobile company at scale, we needed to do something qualitatively different,” said Mike Shaver, Facebook’s director of mobile engineering. “We needed a nuclear option.”

The transformation of Facebook does not end with Facebook for mobile. The Social network giant is planning to launch a new service ‘Graph Search’. Facebook is expecting this new service to compete with even Google Inc (NASDAQ:GOOG), (at least someday).

The new app Graph Search will take a specific question, and will provide the answer, unlike the others, which provide links to other places to find the answer to the Query. Graph Search, as per the expectation of Facebook, will be able to compile all the information that the community supplies on local results like restaurants, and will recommend a location based on the users content.

This service of Facebook is identical to Yelp. But the declining user base of Yelp is reflecting the ample opportunity for Facebook to come up with its Graph Search.

Facebook is set to release its earnings for the fourth Quarter of 2012 today after the closing of the trading day. The company is expected to gain by penetrating deeper into the mobile market. According to Topeka Capital Markets Inc., Mobile advertising contributed 24 percent of the total in the fourth Quarter, which is a rise from 14 percent in the prior Quarter.

Facebook Inc (NASDAQ:FB) is experiencing success in its mobile apps in fits and starts. The recent Poke mobile app of Facebook allows users to send messages and photos that self-destruct. This app of Facebook is similar to Snapchat and competes against this popular rival.

“Whether it’s Snapchat or Twitter…consumers can be finicky,” said Aaron Kessler, an analyst with Raymond James Associates Inc. “That’s the real question: Does Facebook have staying power on mobile?”

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About the Author

Aman Jain
Aman is MBA (Finance) with an experience on both Marketing and Finance side. He has worked as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, reviewing tech gadgets, playing PC games and cricket. - Email him at [email protected]

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