Facebook Home

May 16, 2013

Over the past few weeks, I have been seeing a lot of posts about how Facebook Home is a flop. Bloggers, tech media and vocal users have been decrying the removal of their favorite widgets from the home screen, expressing privacy concerns about trusting Facebook with even more data (primarily HNers), and citing low adoption rates as proof for how it is a flop.

But Home wasn’t intended for them in the first place. Facebook is playing the long game here, and Home is targeted at a completely different group of people.

  • Consider the non-tech sector, 40+ segment of the population. Some (many?) of them have only owned a feature phone till now, and are thinking of getting a smart phone for the first time. Their old phone was good enough, but everyone looks at them condescendingly on the subway when they flip open their Nokia, so they decide to get a smart phone. Or they technically use a smartphone at the moment, but their usage behavior is more like that of a feature phone. They might even be afraid of or not interested in apps etc., since managing one computer is harrowing enough. Which phone do they get next? They do use Facebook regularly on their PC to keep in touch with their families, browse their kids/grandkids’ photos etc., so a phone that makes it easy to do so makes a lot of sense for them. Yes, other applications like maps and email could be quite useful for them, but they don’t know that and their old phone didn’t have that, so they won’t care about not having easy access to those apps.

  • Consider young teenagers getting their first phone. They don’t drive/commute on their own, and might not even have an email account, so again email/maps apps don’t matter to them at the moment, at least as much as they do to us. For some of them, Facebook might be their primary entertainment and communication platform, and a Facebook phone is ideal for that.

Basically, Facebook Home, in its current iteration, isn’t meant for the power users of other smartphones. It’s meant for new smartphone users who haven’t been exposed to all the other things that smartphones can do, and do not particularly care about those features. This group cares about only a few things…

  • The phone should work as a phone.
  • It should be inexpensive (HTC First with FB Home was $99 originally, and $0.99 currently with a 2-year contract).
  • It should be easy to use (which this arguably is if your primary use is a phone and Facebook).

Why is Facebook targeting this segment?

The obvious reason is to ensure that these users remain hooked to Facebook and don’t start using any integrated Google services, so it’s partly a defensive move. But there are also, I think, more longer term reasons. By controlling the entire user experience on the phone, Facebook is not only gathering more data from the Home adopters, but as they keep adding updates and potentially play nicer with the other installed apps/widgets, they learn from the adoption rates what the power users care about and how to replace/copy those functionalities incrementally inside Home. Facebook hopes, that a future version of Home will please even smartphone power users (or atleast a significant portion of them), while keeping them hooked to Facebook.

For instance, Home might add a simple search bar, which launches the Google Search or Maps application when its not a search relevant to Facebook. That might ease some of the complaints, and users who primarily cared about FB + Google + Maps on their phone, might try out Home. Then, what if it starts showing the results in its own view rather than launching the Google apps. The final move would be to change the backend to replace Google search/maps with say Bing for a revenue share, or maybe Facebook tries to build its own search engine. If each step is incremental, users might not notice or care enough to switch back. And that’s the long term play that I believe Facebook is attempting with Home.

Why are current adoption numbers low?

First of all, Home launched on just 3 phones, which means that it’s been available to only a small number of Facebook users. A large number of the the 1-star reviews have been users complaining about the lack of Home on their phones, so the average review score is highly misleading. Secondly, even among the users/new buyers of those 3 phones, the initial target segment is composed of people who are late adopters or young kids who need to convince their parents first. I am not surprised at all that adoption rates are slow. It doesn’t matter to Facebook as long as they keep adding users, and those users stick. Home is not an app, it intends to be a platform relegating Android to the background as completely as possible.

Techcrunch wrote a highly speculative post stating that download numbers are low because Facebook’s internal dogfooders were primarily iPhone users and hence didn’t care about home screen widgets. That [logic] sounds stupid to me. Facebook is not a stupid company. This is a small launch and the only numbers that actually matter at the moment are the usage behavior and revenue metrics for the current users of Home, and the adoption rates for the actual targeted audience.

Is the Facebook Home strategy working?

I think it’s too early to say. I also don’t have any actual data to analyze adoption stats across target segments, devices etc. However, it does seem that adoption rates aren’t high and have been slowing. 1 million downloads does seem less than what I would have expected after one month, but again, I don’t have the numbers on how many of their primary targeted users own one of the three chosen phones. However, this is a long term game and Home will improve significantly over time. The design of Facebook Home, particularly the Chat Heads feature is pretty cool. So the early numbers are pretty much pointless, and Google in particular, should not underestimate the danger that Home brings to Android.

For Facebook, the real concerns are…

  • how to better spend their marketing dollars so that their ads create a positive buzz among their users? At the moment, their ads suck. The airplane one is atrocious, the other one is slightly better but still doesn’t evoke any emotion, unlike some of Google’s ads, for instance this one.
  • how to ensure that Facebook Home is promoted by the carriers. If their initial target audience is “relatively unsophisticated”, then by definition, they are more swayed by promotions and product placement at the stores. Which is why, if the rumors around AT&T planning to drop the HTC First are true, then that’s a real problem and Facebook needs to do what it takes to stem that.
  • Facebook needs the phone manufacturers to support and promote Home, since they are not in a position to build the hardware themselves yet. However, phone manufacturers don’t want to be relegated to the background either. Samsung has its own ideas with Tizen, Motorola is controlled by Google, Microsoft/Nokia and Apple will never allow this and so that leaves HTC, LG and other smaller manufacturers. Negotiating and managing these complex partnerships with the manufacturers is super-important for Facebook Home to succeed. Easier said than done.

Summary

  • It’s too early to say whether Facebook Home is a success or not.
  • The actual target segment for the current version of Home probably does not include you (if you are reading this blog), and no one apart from Facebook has the data to compute actual adoption rates and usage in that segment.
  • Facebook is playing a long game here in which they are trying to become a platform, not an app. If they succeed, they can eat into Google’s search/maps revenues directly.
  • Facebook needs to do a better job of marketing and business partnerships with phone manufacturers and carriers, but their own business incentives might be at odds with Facebook.