Facebook's Mobile Strategy is Crisis and Opportunity for Location Based Services
Facebook announced a new mobile strategy yesterday, positioning itself as the infrastructure at the center of mobile apps for shopping, socializing and checking in.
Many commentators declared that Facebook would now dominate the booming business of location-based deals. But the truth is that Facebook's platform will catalyze the growth of check in services by making them more accessible to the mainstream. True, companies that don't innovate will be swallowed up, but those that carve out a strong niche will find Facebook's mobile strategy to their advantage.
Mark Zuckerberg, after laughing off the rumors that Facebook was building its own branded phone, announced a three pronged approach to pivoting Facebook from a mobile app to a mobile platform. First, the company would be making its Places API read, write and search, so that third party apps could begin to easily integrate Facebook check ins with their own services.
Second, Facebook announced a universal login, basically Facebook Connect for mobile, that would allow users to sign in to any app with a single click so long as they are logged into Facebook in the background.
Lastly Facebook announced a new Deals feature which lets businesses create their own discounts for customers who check in with Facebook places. Interestingly, unlike the hot startup Groupon, Facebook does not plan to take a cut on these transactions (unless, of course, users pay in Facebook credits).
Mark DiPaola is CEO of CheckPoints, a mobile shopping app that currently ranks #1 in the Apple apps store's free lifestyle category. "We do know that Facebook hit 200 million mobile users today. If their Places audience is even 1/10 of that, they're still much larger than a Foursquare or Gowalla," says DiPaola, who believes his company can benefit from integration with Facebook Places. "Their new emphasis on mobile and location-based deals will increase general awareness of the category among its huge, highly engaged userbase."
Much as Zynga was able to build an enormous gaming business on top of Facebook's vibrant social graph, the opportunity now exists for savvy players in the mobile space to supercharge their growth by integrating with Facebook's platform. For established players like Foursquare, the challenge will be to define themselves in opposition to Places and decide if they want to continue to aim for the mainstream, or stake a smaller, more well defined user group.
Image from Accuracy and Aesthetics
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