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Dublin: 13 °C Thursday 23 October, 2014

Column: The ‘Facebook phone’ is here – what does that mean for consumers?

The Facebook HTC First is a fresh move by the social network giant in its quest to become a ‘mobile first’ company, writes Eoin Lynch.

Eoin Lynch

THE NEW FACEBOOK phone goes on sale in the US today and is expected to be available in Europe later this year. If you are desperate to get your hands on one though do not despair, just get a HTC phone, download a bit of software, stick a Facebook logo onto it and – hey presto! – you’ll be ahead of the pack.

The Facebook HTC First is a move by the social network giant in its quest to become a ‘mobile first’ company, a position that it has been eyeing up ever since floating on the NASDAQ last May. Becoming ‘mobile first’ does not mean that Facebook is going to start manufacturing mobile phones and setting up telecommunications networks, not for the moment anyway. What it does mean is that Facebook is developing software that you can download onto a handset and which will allow the company to collect even more valuable data on you, the user.

Data is king

The way Facebook makes most of its money has changed very little since 2004 when the company was founded. The revenue model is based on advertising. Facebook is a space where people come to, share information about themselves. Facebook then legally collects this information and sells it to advertisers, who in turn pay to place or “serve” ads on the website to its users. It is ingenious – and like all ingenious business models it is cyclical and very simple. The business model has not changed, data is still, and will remain, king for Facebook.

At the Facebook headquarters in Menlo Park, California last Thursday, Mark Zuckerberg introduced “Home”, the software that is on the HTC First phone. “We’re not building an operating system” the CEO stated, “We’re building something that’s a whole lot deeper.” He even got a bit existential about it all, saying “the home screen is the soul of your phone. It sets the tone. We feel it should be deeply personal.”

The Home software basically takes over your phone so that most or all of your communication is done through Facebook. The Cover Feed feature takes over the phone’s lock screen and home screen to update the user on what his or her friends are doing. Chat Heads allows you to speak to people on Facebook, see a picture of them, and do other things on your phone such as receive personal notifications on Facebook or delve into the “family of apps” that Facebook Home offers. It is the Facebookification of your mobile, and some people will undoubtedly love it.

A “deeply personal” experience

Advertising on mobile phones is a tricky business. It is too impractical to deliver side or banner ads onto a mobile screen. Size matters and this type of ad would simply be too small on the screen. The alternative is to have ads that intermittently appear on the whole screen for a couple of seconds, but in reality this type of ad is too annoying for most of us to bear. Until Facebook figures out an effective way to present adverts on mobile phones, it is likely that they will keep phone ads to a minimum. Instead it will take the masses of data that it discover through this “deeply personal” experience and allow advertisers a more targeted approach on its main or desktop site.

Facebook has released a statement saying that the privacy policy on the main site will apply to Home.

In fairness, some people are more than happy to share every iota of information about themselves with Facebook. Privacy, it could be argued, is being slowly strangled to death by convenience. The type of data that Home will allow Facebook to gather on smart phones is already being gathered by Google. Realistically, Facebook does not want to know anything about its users other then being able to put them into a demographic profile that can be sold. The more specific the profile, the higher the price.

The Hacker Way

In reality, Facebook Home may not work for the company in the sense of being a ‘big hit’. What it definitely will do, though, is act as a very powerful market research tool. Facebook is determined to be a player on the mobile market, so if Home does not work it will inform their next move in this area. This is an approach that Zuckerberg calls ‘The Hacker Way’, which he outlined in an open letter to his shareholders.

Facebook will inevitably get a slap on the wrist from a few data protection commissioners and there may be a civil action or two – but within three or four years we will have seen a few versions of this operating system and, eventually, Facebook will get it right. It is also notable that Facebook is partnering with the Taiwanese provider HTC on this project.

Eoin Lynch tweets at @Eoinlyncho

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