Apple Ping Can't Overcome the Facebook Zing
When Apple (AAPL) had its product announcements a couple of days ago, its new music-centric social media service Ping was supposed to connect to Facebook But -- poof! -- that deal disappeared because of "onerous terms" as Steve Jobs said. Now Facebook has apparently blocked Ping from the usual API access to the service.
My BNET colleague Ben Popper thinks that it will blow over because both Apple and Facebook have enough to gain, but I disagree. Yes, Apple really needs Facebook to make Ping grow the way Jobs wants. But without significant compensation, Facebook would only hand over the keys to the store for nothing.
How do I know that Apple needs Facebook so much? Because Apple was willing to step outside of its ecosystem in the first place. The company doesn't like to partner, unless the partnership involves getting a cut of a sale that another company makes. But building a real social network atop iTunes? It simply can't happen, because the interaction is too restricted. There is a limit to the number of full-on social networks people will support through participation. It gets to be too much, so any network must deliver in multiple ways, allowing personal connections, the ability to reach wide audiences (for those who are in business or want notoriety), and a chance to be more than a one-trick pony.
Ben's argument, which would be sound if we were talking about different companies, goes like this:
In the case of Ping, Apple is trying to breathe life into a new social network. Facebook Connect adds energy and ease to this process. In return, Facebook gets access to a treasure trove of data about users purchases of music, movies, apps and books.There's just one problem -- Apple doesn't give up data. Simply won't. Sell music? The relationship is between the buyer and Apple, not the buyer and the music label. Sell an e-magazine for the iPad? One of the problems publishers have had is that Apple won't give up the subscriber data, which is critical to these companies. Apple wants to own the relationships and not let anyone else potentially muscle in.
Facebook has already done a deal with Amazon where it didn't get data from the retailer. My bet is that Mark Zuckerberg got significant cash or other type of consideration for his company. Otherwise, why send over user data to Amazon? It's one thing to push for social networking, but there has to be a promise somewhere for a business.
Maybe the Ping-Facebook connection was an attempt by Jobs to get a toehold and eventually to subsume Facebook. That would be an incredibly powerful advantage when looking at such competitors as Google (GOOG) or Microsoft (MSFT). Keeping at arm's length allows Facebook to ensure the value of its data and maximize the size of any acquisition deal Apple might eventually want to explore.
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