Facebook makes moves to strengthen its mobile platform by acquiring another mobile based company
The mobile gift application, Karma, has become Facebook’s first acquisition since going public.
Karma is the 5th mobile based company to be acquired by the social networking site this year.
Facebook has not been shy about admitting its weakness in monetising its mobile platform and has been on a mobile company shopping spree since the start of the year.
More than half of the social network’s 900 million users access the site through mobile devices more than PC’s or laptops.
The preferred use of mobile devices to use Facebook has shed light on the fact that mobile advertising is an important aspect for the company’s future.
The shift of users accessing the site predominantly through mobile has led many to question Facebook’s advertising revenue potential since the site’s ads are created for PC’s and Laptops, not mobile devices.
However, Facebook may face challenges incorporating advertising in its mobile platform to drive revenues. Research has shown that consumers are often resistant to mobile adverts.
A study carried out by Upstream this year shows that over 70% of UK and US consumers find advertisements on mobiles or smartphones irritating. Only 11% of Brits who use their phones to access the internet have ever clicked on a mobile ad.
"Facebook has acknowledged something about mobile that no other major player has been prepared to recognise to date: that the growth in impressions available to marketers as mobile penetration grows does not equate to an opportunity to monetise the channel by bombarding people with advertising," said Marco Veremis, President of Upstream "Mobiles are very personal devices and people are very resistant to any form of mobile advertising."
However, Facebook’s recent investments in mobile along with its new App Centre could allow it to be the first to offer a mobile development platform at browser-level.
"The App Center lets you install apps on Facebook’s mobile site. From the user’s perspective, this is important because it means apps are always up to date and from a developers’ perspective, it saves time and money," says Justin Kistner, Director of social products at Webtrends. "Instead of needing to specialize in the native language of each mobile OS, the same developers that build web-based games can build apps for mobile."
Facebook’s investments being predominantly in mobile show the company’s drive in becoming a successful mobile platform.
"Facebook’s investment in Instagram and Glancee further demonstrates its dedication to winning in mobile. As does its newly released news feed ads that will flow into mobile," says Kistner. "If Facebook can achieve similar monetization value for mobile users, then that will add massively to its revenue."
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