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A Very Difficult Patient To Treat

May 28th, 2012

Facebook lately is acting a little bit weird , weirder than it use to do in the past. The turning point was actually the failed/succesful IPO (depending on which side you stand).

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As you might know, two fridays ago Facebook went public with an initial price of $38, starting to trade at $42, quickly dropping at $31, remaining almost stationary since then. Lots have been speculated about this trend and what is now clear is that Facebook gave more detailed info only to some investors who worried changed their investment scheme, contributing to the quick fall of the shares. They knew it wasn’t going to pop so they decided to take their money back as soon as possible leaving the minimu on the table. A minimum that guaranteed Facebook and who has invested with a long term plan in mind a 16 billion mattress where to sleep comfortably.

After this event thoug, things started to become weird.

Last week Facebook released its own Camera app for iOS. If you’ve used it you would have surely noticed that it’s something very close to what Instagram is. The only problem is that Facebook has just acquired Instagram two weeks earlier (even if now the DOJ will investigate the deal that could be postponed until the end of august).

Now, my question is: why Facebook released a product that is clearly going to compete in a big way against its recent purchase?

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To be fair this question then involve many other questions. The Facebook Camera app is brilliantly designed, very polished and it allows you not only to snap, edit (with quite good filters) and upload pictures but you can also look at your friends pictures in a better way compared to the standard Facebook mobile app. This all means that the Camera app was in the release pipe for a long time, so why did Facebook bought Instagram in the first place? They already had something similar in the work for theyr own so why?

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The answer though is the scariest part. Is now even more obvious that Facebook bought Instagram for its people, not for the App itself. This plus the new Facebook Camera App, means that Instagram will really die from a painful dead. If the staff will be moved to work on the Facebook Camera App (and this is the easiest thing that will happen) it means that Instagram won’t be updated and curated as much as before and on the long run this can only mean that it will end up by being shutted down.

Even if I’m saying so, I really hope this won’t be the case. Not only because I love using Instagram (which I really do), but also because a whole ecosystem will die with the App. Since they’ve started offering API integration, many new services were developed to allow users to better enjoy their feeds online or to easily print their favorite pictures. A new webiste even created a sort of curated art gallery where pictures from very active and talented artist can be purchased printed on great canvases.

Close Instagram and you’ll close dozens of services like that. It would be a loss for many users and workers out there.

If you were thinking this was the only weird part of the story, you were wrong. There’s much more on the table.

There’s another example of Facebook competing with himself. If you count, there are now three Facebook app on your phone: the mobile version of the site, the Camera App and the Messenger app. The stock Facebook app is judged by many (if not all) to be pretty unusable: it’s slow, it breaks a lot and it’s very clunky overall. On the other side you have two other companion Apps focused on just one service that work great. The Messenger app is fast, reliable and is contributing very hard in killing traditional text messages. The new Camera App other than looking great offer also great functionalities (like the easy editing feaures), but most importantly it works. If you try to look at friends pictures via the stock Facebook app you know that it’s very diffult to do so: pictures will take ages to load or won’t load at all, you get errors and you get frustrated quickly. With new camera App is now a pleasure to browse thorugh images and even with the weakest cellular connection you are still good to go.

Facebook has ammittedly said that it’s having problem in monetizing its mobile app and I don’t think that their recent moves will help them solve their problems. I have three Facebook Apps and I find myself using only the Camera and the Messenger Apps, leaving the main one taking dust buried into a “Social” folder. Reading on the internet it seems like I’m not the only one behaving like this, so I wonder how could Facebook solve its problems.

A Facebook phone could be the answer? Maybe, or maybe not. It’s a difficult market to enter with big player already well established like Apple and Google. Clearly a Facebook phone would be aimed at lower income markets where you count on big numbers, but it’s market populted by hundreds of handsets and it would be difficult to penetrate it. One thing that could help Facebook is the finally-approved Googlerola (Google acquired Motorola a while ago, but only few days ago it was fully approved). This acquisition had the easy-to-anticipate effect of upsetting many Android’s OEM like HTC who know fears an unfair advantage for Motorola Android device.

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Facebook can enter this dispute and can bring together some upsetted OEM to build a new phone for them. This is a very speculative options but in this crazy world that is tech, you can expect almost anything.

Finally, I want to finish with my all-time-favorite (so far) Facebook crazy rumor: they are going to buy the browser company Opera. Because they now have fresh money and because they acquired Instagram for a crazy price (1 billion US$), it seems they are going to buy everything. This rumor doesn’t makes sense or at least I don’t want to give it much credit because it can have a scary outcome: Facebook = The internet. They are already everywhere with their Like button, if they also conquer a browser they are really going to know everything about you.

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The problem is that they don’t have to acquire Opera, they can spend much less money and acquire an already-existing Facebook browser: RockMelt. It’s built on top of Chrome so it means it performs great in terms of speed and reliability and it adds a deep integration with Facebook. The chat is always there, notification are just a click away in such a way you don’t really need to actually go on facebook.com to stay updated. This is the real turning point of a Facebook browser. Because the frame is Facebook, the whole internet is framed into it, constantly feeding the social network giant with free and fresh data about you. If they then export this model into mobile they’ll surely start to see their profits going up, a lot.

So, in conclusion I totally agree with all the majors publishers that are labelling CEO Mark Zuckerberg as a wise-beyond-age man. He clearly has something big under his sleeve that we can’t yet see and that’s why to us their strategy seems a bit confusonary. I’m sure that when they’ll make up their (and ours) minds, Facebook will really become the internet as a whole and Lazarus will then stand and walk towards a big pile of money.