Facebook on Friday is set to become a publicly traded company, which is expected to generate a multi-billion dollar windfall for the company and its founders.
But since the social networking giant filed for its IPO back in February, there’s been one question that’s come up time and time again: mobile. Specifically, how Facebook is going to make money on mobile.
According to recent reports, Facebook users spend more time accessing the network from mobile devices than from the desktop site. But, as Facebook admitted in a recent SEC filing, it’s not sure how to turn that time spent with Facebook on mobile into dollars and cents.
Patrick Moorhead, principal analyst at Moor Insights & Strategy, a tech-industry research firm, points out that Facebook is hardly alone in struggling to monetize mobile. In fact, few companies, especially in social networking, have figured out how to convert mobile uses into money.
“The long-term view says, because people are spending so much time on their smartphones, they essentially have them with them 24 hours a day it seems, that things like check-ins and deals would be the place where the money can be made,”
Checkins, of course, involve you indicating to your friends and followers that you’ve arrived at a specific location. Foursquare is a popular competitor of Facebook’s in this arena. And deals, something that Facebook has tiptoed into, is an especially crowded space dominated by Groupon and Living Social.
Moorhead said this could really take off if the service could be automated, where merely by being near a venue you get checked in, and could then receive deals, all through the Facebook experience.
One thing that’s not on the horizon, according to Moorhead, is some sort of subscription model, even if it involves some sort of pass-through from the mobile carriers.
“I think that the freemium model, where it’s free upfront and then you pay for add-on services is the way to go,” Moorhead said. “I believe that Facebook will be able to best monetize it through … link advertising and the ability to monetize local deals and customer retention programs.”
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