Wednesday, October 20, 2010

Why Apple Will Buy Facebook (If Facebook Says YES!)...

If Apple buys Facebook it would solve it's biggest problem - Apple's weakness in the Social Media Market.
Facebook is THE PRIZE.  I repeat it. It IS the PRIZE.  Why?  I have said this before in other posts, BECAUSE THEY HAVE THE PEOPLE AND THEIR TIME.  Let us first look at the threats that mighty,seemingly impregnable, Apple faces.


Google
Google, with its OS Android, is a steady threat to Apple.  So far, Apple has been able to withstand Android's encroachment, by the dazzle of their designs and innovations.  It is true, that in substantial ways the Android phones have features the iPhone does not.  But what matters is the perception of the public.  Right now, the public sees the iPhone as THE standard to match.  Google's own efforts with Buzz and its Wave program have basically been second class.  No one who has Facebook would join Buzz or Wave, and since most people who are into social networks use Facebook, those two Google services will suffer.  Also as we have stated in another post, Facebook and Apple's app store are taking some searches away from Google.  So if Apple bought Facebook, it could put further pressure on Google's core money maker - internet searches.

Facebook Phone
If Facebook come out with their own phone, it would be a disaster for Apple.  No doubt, Facebook would little choice than to adopt Android for its operating system on that phone, which wold further increase sales of the Android OS in droves.  But, an even greater threat is that such a phone would no doubt have all the features one would have on a web browser with Facebook.  It is true that the iPad could do all of that through the browser for now (assuming Facebook does not implement plugins), but the iPhone would not have those features.  So it would be a tremendous advantage for Apple to own Facebook to thwart Google's Android and to boost the iPhone to unheard of sales.

Facebook's Own Ineptitude
Facebook itself has made plenty of mistakes.  Some people have begun to leave Facebook because it has become totally commonplace.  The joke we have all heard is, "he's a Facebook friend", meaning I do not know this person, or, if I do, I have not spoken to this person for years, but, I will be his friend on Facebook so his feelings are not hurt.  A study done in April of this year by Roiworld, cited reasons why some teens are either leaving Facebook or not joining it. This survey was concentrated on teenagers.  Here are the results of this survey:
1.  Of the 2 hours a day they spend on the Internet, 80% of those two hours were spent on a social network.
2.  16% left Facebook because their parents joined; 14% because there are too many adults on it; 13% were uncomfortable with people seeing their personal things.
3.  2 out of every 5 who have spent money on a social network consider it money well spent
4.  7% have purchased "virtual gifts"; 14% have purchased "currency in a game to buy virtual items"; 14% have spent money to buy accessories for their avatar in a game.
5.  50% are given an allowance to spend on these social networks
6.  Social net games are taking over traditional game sites like Yahoo! Games, Addicting Games and Miniclip count an average of  2.5 hours per week while Facebook, Gaia Online, and MySpace registers 6 hours a week on average
7.  45% love Gaia Online as a way to meet people from around the world
8.  Facebook is still the top social net site among teens


But there are instances when young adults are also leaving Facebook. Now Facebook is still growing in numbers, but, it is not good when it is losing anyone and assuring itself that the future users (teenagers) are joining.  The reasons for the people leaving are various.  For the young adults, it many times has to do with privacy issues.  Now to put things in proportion, out of all the comments to this New York Times article that I am citing, this comment got the largest agreement (378): "'Facebook Exodus' ie. three of my friends left Facebook. This article is absurd and based on a few anecdotes."  Now even though Facebook has made some large errors, it is doing a lot of things right.  But, look at how confusing their implementations of their new features are.  I still do not fully understand the difference between a Group and a Page in FaceBook and I suspect many others don't either.


Bing
Finally, and least important, would be the checkmate Apple would put on Microsoft.  Microsoft is now working with FaceBook to be able to search the comments and pages through its search engine.  This is a feature that Google now does not have.  Such abilities would have to be granted to Google by FaceBook.  If Apple, owns Facebook, it could control Bing and use it to weaken Google.  It would control Bing in one of two ways.  Apple could continue the cozy little relationship between Microsoft and FaceBook in regards to searches, OR, they could break the agreement with Bing and design perhaps their own search engine for this, which would immediately gain millions of users through Facebook.  Steve Jobs, was upset when Google came out with their own phone, his now famous quote being:

We did not enter the search business, Jobs said. They entered the phone business. Make no mistake they want to kill the iPhone. We won’t let them, he says. Someone else asks something on a different topic, but there’s no getting Jobs off this rant. I want to go back to that other question first and say one more thing, he says. This don't be evil mantra: “It’s bullshit.” Audience roars.
Conclusion:
What will happen?  We are not sure of course.  Apple has everything to gain from such a purchase of Facebook.  What does FaceBook get from it?  This is unknown, except lots of cash.  But Mark Zuckerberg does not seem like a man who needs, or, is looking for a lot of cash right now.  He understands he has the beginnings of a massive empire.  What will he do?  Perhaps Steve Jobs can offer him his dream under Apple's umbrella?  We shall see.  Both men have strong wills and Jobs is famous for not doing well with disagreements.  Either way, when both Jobs and Zuckerberg had diner two weeks ago, at Jobs' house, I am sure interesting things were discussed, and it was not just about Apple's new Ping feature in iTunes interfacing with Facebook.




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