Facebook Home Picked Over by Analysts

Zuckerberg and company unveil Home.

Say what you will about Facebook, the company is ambitious: in a Feb. 5 press conference, CEO Mark Zuckerberg and his executive team whipped the curtain back from Facebook Home, an app designed to “skin” Android smartphones with a customized, Facebook-centric start screen.

With Home installed, the user’s screen displays a modified version of the Facebook news feed, with an emphasis on images; it also includes new features such as “Chat Heads,” which sprinkles the screen with little icons of friends’ heads; tapping on them activates a messaging interface.

“On one level, Home is the next mobile version of Facebook,” Zuckerberg told the audience. “On the other, it’s a change in the relationship with the next generation of computing devices.”

The company also announced the Facebook Home Program, which will partner with carriers and device-makers to pre-load Home onto select devices. The first “Home” phone will be the HTC First, a $99.99 phone that will ship April 12 from AT&T.

Facebook clearly wants to alter the dynamics of the mobile game in its favor. But will the social network’s billion-or-so users actually find Home appealing?

“The fundamental question to me is, will users want to essentially spend all of [their] time in this one über app?” Jack Gold, principal analyst of J. Gold Associates, wrote in a research note circulated to reporters soon after Facebook’s announcement. “I’m sure those that spend 90 percent of their time in FB will find it appealing. But I believe that is a small minority.”

Many users—especially the ones who only use the social network once in a while—may come to see Facebook Home as a sort of prison, Gold added, with “too much control and too many boundaries.” So while the announcement could appeal to “die hard” users, more casual ones may avoid the software altogether. “The fact that the FB app is an app and can be installed on Android devices (although I didn’t hear them say which ones/versions) will potentially make it easier for users,” he wrote, “but also make it easier for users to dump the app if they get bored with it or don’t find it appealing.”

But other analysts saw Facebook’s move as one with comparatively little downside. “This is a great experiment for Facebook—it’s much lower risk than developing a phone or an operating system of its own, and if it turns out not to be successful, there will be little risk or loss to Facebook,” Jan Dawson, an analyst with Ovum, wrote in a research note. “If it does turn out to be successful, Facebook can build on the model further and increase the value provided in the application over time.”

But how will Facebook make a buck off Home? “It will allow Facebook to track more of a user’s behaviour on devices, and present more opportunities to serve up advertising, which is Facebook’s main business model,” Dawson added. But that also raises a significant challenge for the company: Facebook’s objectives and users’ are once again in conflict. Users don’t want more advertising or tracking, and Facebook wants to do more of both.”

Finally, at least one analyst is questioning whether Home is a competitive challenge to Google, which built Android and profits from its mobile advertising. “We think FB Home posts a threat as it essentially becomes the main user interface for an Android smartphone and puts services like Gmail, search, YouTube, and Play in the background,” wrote Sterne Agee analyst Shaw Wu. “The big question is whether Android licensing terms will change in the future to prevent something like this to happen.” If that proves to be the case, things could get interesting very soon.

 

Image: Facebook

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