Yes, Facebook is not currently monetizing its mobile applications nor website for these devices, despite a growing percentage of users interacting with the site exclusively in this fashion.
It’s an issue that Facebook highlighted in its registration statement and was described as a “challenge” by Jenna Wortham of The New York Times.
Yet Wortham’s perspective on things is way off. She states, “Facebook is not the only company struggling to translate the success of its website to mobile devices.”
Struggling? As one of the most popular destination sites on mobile devices, I would say that Facebook is probably one of the single most successful mobile-supporting company in the world.
Rather than arguing that Facebook is going to find it hard to succeed in an increasingly mobile-centric world, the real argument should be that Facebook is on the verge of unlocking the greatest opportunity facing the company.
Monetization is not the problem for Facebook right now. The company is racing to continuously improve its mobile offerings, prior to focusing on the monetization strategy.
That’s because with over $3.7 billion in revenue and $1 billion in profits, Facebook can afford to take its time perfecting mobile strategy. What the company’s trying to protect is a $100 billion-a-year revenue opportunity.
I’ve spoken to numerous people who are quick to point out the weakness in Facebook‘s current advertising strategy:
- “Advertisers have questionable return on investment.”
- “Facebook pages have low engagement levels.”
- And now “Facebook isn’t monetizing mobile offerings.”
Here’s my official position: It doesn’t matter how much money Facebook is making as long as it keeps dominating attention.
As long as Facebook continues to grow its attention base (amount of time users spend on the site), it will become the largest media company ever built.
The chart below, posted by David Stewart in response to a question on Quora, is really the only thing you need to know.
The more users that Facebook acquires, the more time users spend on the site. The more time users spend on the site, the greater Facebook’s monetization opportunity becomes. Whether the users are spending time on mobile or spending time on the web, Facebook’s opportunity grows dramatically. Susan Etlinger of Altimeter Group calls the lack of mobile revenue a “huge Achilles’ heel.” She couldn’t be further from the truth. Instead it’s one of Facebook’s fastest growing opportunities.
More importantly, with $9 billion in cash following their IPO, Facebook will officially have enough money to beef up their mobile strategy in any direction they wish. Facebook’s greatest weakness over the coming year will not be their lack of a monetization strategy with mobile, but instead a bank account filled with cash and a limitless set of options for where they go next. Will they finally release an official “Facebook phone?” Will they try to provide cloud services to developers thanks to their brand-new data centers?
With countless strategies now available to Facebook, the real question over the next year or two is what will Mark Zuckerberg decide to do with Facebook’s incredible mobile opportunity? Here’s one person who could care less about how they make money on mobile next month. I’d be much more concerned with the untapped opportunity that could be fumbled. If history proves to be a good indicator of the future, I’d expect bold moves to come.