Facebook Inc (NASDAQ:FB) has been linked with a deal to acquire BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB). At this stage there is no reason to believe the rumors. Several companies have been linked with a BlackBerry acquisition, and only one will ever manage to get their hands on the company. The Facebook deal is an interesting prospect, however, and there are reasons that BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) might be a good fit for the social network.
Facebook Inc (NASDAQ:FB) has been linked with a smartphone before, and the market didn’t seem all that positive about the idea. Back then sentiment around Facebook was less than positive. Analysts and investors had been burned by the company’s IPO, and Facebook did not look all that strong. Things are different today.
For much of the past decade, Crispin Odey has been waiting for inflation to rear its ugly head. The fund manager has been positioned to take advantage of rising prices in his flagship hedge fund, the Odey European Fund, and has been trying to warn his investors about the risks of inflation through his annual Read More
Facebook goes mobile
Assuming Facebook Inc (NASDAQ:FB) doesn’t show a massive negative surprise in this afternoon’s earnings report, mobile will be recorded as the most important part of the business. Facebook has made strides in the area in recent years, and it will have to concentrate on mobile for future growth.
All of the other big tech companies are making hardware. Amazon, Apple, Google, and Microsoft all have hardware as a central part of their business model today. Ten years ago only Apple could have made that claim. Facebook may be falling behind in its bid to become a platform that other software runs on.
Facebook Inc (NASDAQ:FB) makes most of its money from advertising, and it will continue to make most of its money from advertising. It competes with Google in the business, and Google is far, far ahead of the Menlo Park firm in terms of cost per click and advertiser trust.
Facebook mobile opportunity
In order to ensure it continues to be as important in user’s lives as it has been for the last five years, Facebook Inc (NASDAQ:FB) needs to do more on mobile than just advertise. It needs to build itself a moat that will allow it to protect itself and grow revenues over the coming years.
Google still relies on its mobile offerings for growth. That leaves it less flexible than Facebook Inc (NASDAQ:FB) in mobile. If Facebook moves into mobile hardware, it would have more control over the space, and could carve itself out a niche in the industry. The brand is likely to be more effective among younger customers, but Facebook would have a lot of options.
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) has a lot of software at its disposal, including BBM. Facebook could leverage a strong hardware position with young people for a strong software presence with everyone. BlackBerry may be the best move Facebook Inc (NASDAQ:FB) has if it wants to build a strong moat in the next five years.
BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) is an expensive company for Facebook to consider. It is losing a lot of money, and its entire business is crumbling. It does have a business however, and Facebook might need to move into hardware.