Distilling market noise into market sense

VisionMobile is the leading research company in the app economy. Our Developer Economics research program tracks developer experiences across platforms, revenues, apps, tools, APIs, segments and regions, via the largest, most global developer surveys.

Back to the Future: How Facebook is challenging Google at the eyeball game

[Facebook is competing for eyeballs on Google’s own turf: Android. Guest author Francisco Kattan explains why Facebook’s Home strategy takes us back to the days of the 2005 home screen turf war and how Google, Yahoo and Samsung are impacted]


By now most of you have heard of Facebook Home. Some of you might have even tried it. If you have been hiding under a rock for the past month, there is a good summary here:

Facebook Home “replaces your standard Android’s homescreen with an immersive Facebook experience featuring full-screen photos, status updates, and notifications. Facebook also announced that a special version of Home will come pre-installed on the new HTC First phone on AT&T.”

Facebook Home is Facebook’s attempt at taking over the user experience and app discovery of most phones without having to build a phone itself (which would result in a meager market share at best). Although execution by Facebook has been poor (see review here), the strategy behind it is brilliant. Moreover, this move represents such a significant threat to other players in the ecosystem that it will spark a second battle for control of the home screen and app discovery.

To emphasize the importance of the home screen to ecosystem players, I borrow heavily from VisionMobile’s own report on this topic, published in 2009:

The active idle-screen (aka home screen or phone top) is the synonym of zero-click distance. It is the most premium real-estate on the handset for service delivery and promotion.”

“The ownership of the idle screen will become as elementary as customer ownership; as ubiquitous as handset branding; and as important a monetisation tool as handset accessories.”


More than a Home Screen

VisionMobile - Facebook Home Screen

But Facebook Home is not just a home screen – it is a very deep application itself, with its own contacts, its own messaging, its own photo sharing, its own video sharing, and more (see illustration above). Facebook is not just providing a launchpad or discovery portal for other apps on the phone, it is virtually replacing many of them by pushing them down, deeper into the phone, where they are harder to discover. If you have an app that competes with Facebook, this is not cool. And as Facebook introduces new services, other parts of the ecosystem should be worried.

Quoting again from the 2009 VisionMobile report:

The home screen is the starting point for all user journeys; it is therefore natural for the home screen to provide shortcuts into functionality that is used most frequently, such as search – whether it is for contacts, voicemail summaries, free minutes remaining, where’s-my-nearest, what’s my Facebook status and many more creative search scenarios. We believe that the home screen is ideally placed to aggregate all such information from third party sources in the Internet cloud, the network and the device”


Disrupting ecosystem players, one at a time

Facebook unnerves many ecosystem players with its Home move.

Google can’t allow Facebook to take over the user experience of its Android operating system. The idea was for the user experience to be owned by Google and extended by its Android licensees, not a competitor. Many of Google’s own services are threatened by Facebook Home, especially Gmail, Talk, Hangouts, Contacts, and of course Google+. Even Google Maps would be threatened should Facebook launch its own mapping service as has been rumored (It has been widely reported that Facebook bid for Waze before its recent acquisition by Google).

Samsung can’t allow Facebook (or even Google for that matter) to commoditize its devices. Facebook Home reduces the ability of handset makers to differentiate and promote their own services. With Facebook Home, Samsung devices will look and behave a lot like HTC devices.

Messaging service providers like Whatsapp, Google (Gmail), Yahoo (Mail) or the new and cool Just Me can’t allow Facebook to become the default messaging service on consumers’ phones. If you are on Facebook Home, it is much easier to send a Facebook message than dig deeper to find other messaging apps or even the phone’s native SMS client.

Yahoo has bigger problems, but if Marissa Mayer has any hope of fixing the company, it will need to figure out how to have a prominent mobile presence. This is not possible if consumers choose Facebook Home. With Facebook Home, Yahoo’s Mail, Messenger, Flickr, and even Yahoo’s cool new Tumblr service would be pushed down and become a second-class citizens on the phone.

AT&T, Verizon, Telefonica, Vodafone, and mobile operators in general who are still fighting to become relevant in the ecosystem lose even more control of service discovery. Operators today still exert some influence over some handset makers, especially in postpaid markets where they control handset distribution, subsidies and marketing spend. But as control for the user experience moves from handset makers to over –the-top providers like Facebook, the carrier’s influence over the ecosystem is crushed even more.


Back to the Future – The first battle for the home screen

Once upon a time in the not-too-distant past (early 2000s) device makers differentiated primarily on the basis of hardware. What’s the form factor? Clam shell or candy bar? Is there a full Qwerty keyboard? Bluetooth? 2G or 3G? How long is the battery life? But as the hardware became commoditized, device makers turned to differentiation on the basis of the software, and in particular the home screen and overall user interface of the phone.

When I was at Adobe I saw this play out first hand. Device makers were turning to Adobe Flash as the platform for customizing their user interfaces and deliver more engaging home screens. A couple of good examples are the LG Chocolate and the Samsung D900. They both had beautiful home screens, powered by Adobe Flash. The LG Prada took this concept quite a bit further when it launched with a big splash in 2006. A beautiful, fashionable device with cool looking apps running on the home screen, powered by Flash. It was the first phone with a capacitive touch screen. Take a look and you’ll see a resemblance to some of today’s smartphone interfaces. Keep in mind this was before the iPhone.

The operators want their piece of the action. Given the influence large carriers enjoyed over device makers at the time, there was an opportunity for them to take over the home screen to expose their own services. To enable such operators Adobe launched Flash Home in 2008 (launched by my team at the time, coincidentally). See the news here.

“Adobe Flash Home, an over-the-air, customizable UI, enabling consumers to personalize the look and feel of their handsets and discover new content and services via home screens and data-enabled wallpapers”

It sounds a lot like Facebook Home – except that rather than surfacing Facebook services to the home screen, it was about surfacing the operator’s walled gardened services.

Too little too late. Unfortunately for operators, before their efforts to take over the home screen had a chance to succeed, iOS and Android devices began to sell in large volumes, upsetting the whole ecosystem and limiting operator influence even more. Operators diverted their focus to acquiring more data users with smartphones rather than promoting their own data services on feature phones.


How should the ecosystem players react to Facebook Home?

Google. Google could launch its own “Google Home” of course, but a more wise strategy for Google is to block third party app developers from messing with the home screen. This could be done by closing the relevant APIs or more easily by changing the terms of its agreement with developers. Google’s strategy is of course to generate advertising revenues from its services, and this requires Google to “crush down anything that stands between consumer eyeballs and Google inventory” (quoted from a good VisionMobile post on Google strategy: “Flatten, Expand, and Mine”). If any app can bury all Google services behind a proprietary app launcher like Facebook Home can, that app could limit Google’s mobile ad revenues significantly. The way things stand, if Facebook Home were to gain user traction, it is not hard to see that advertising dollars would shift from Google to Facebook. This is not a desirable outcome for Google, and one that, if not blocked by Google, would ignite a battle for control of the Android home screen.

Yahoo. For as long as Google is allowing apps to take over the home screen, Yahoo should copy Facebook’s strategy and develop “Yahoo! Home” to surface all its services to the top of the phone. Flickr pictures, Tumblr posts, Yahoo messaging, Yahoo News, Yahoo Weather, and all other Yahoo services would be discovered much more easily, boosting Yahoo’s advertising revenues. To improve the likelihood that consumers will actually turn on Yahoo Home, Yahoo should learn from Facebook’s execution mistakes and do a better job of integrating with the rest of the operating system and apps. Facebook messed up with this integration and buried even critical OS functions like notifications, battery life, and even the time of day behind Facebook pictures. Yahoo (or anyone else attempting a home screen app) should also do a better job surfacing the user’s favorite apps. In other words, the home screen should expose not only Yahoo’s own apps, but also other favorite apps selected by the user to ensure a higher level of adoption.

Samsung. Samsung should fork Android and launch its own Android version in much the same way Amazon did with Kindle. Samsung is now powerful enough to maintain its own platform, using its own Galaxy brand, its own home screen, an off-the-shelf store (Amazon or Yandex store) and a white label maps solution (like Nokia Maps) – in other words, all the ingredients needed to circumvent Google’s control points. In fact, even without the threat from Facebook Home, Samsung is already investing in a vertical, Apple-like strategy strategy with the Tizen platform. Whether Tizen succeeds or not, Samsung has all the ingredients to fork Android and tighten its control over the operating system.

What are your thoughts? Do you think Facebook Home will spark a new battle for the home screen? Do you think Google should block such apps from taking over Android? What should Samsung, Yahoo, and the other big boys do?

– Francisco (@FranciscoKattan)

  • Tony

    Definitely the worst article of the month, maybe year. Facebook home is a junk piece of software that people don't use. Just look at HTC First sales. They can barely give them away. Google is not going to block home screen changes. ugh.

  • Google wont block Facebook Home for two reasons. First, if it does, it will transform it to the Forbidden Fruit. Second, there is no reason to ruin its name of being a company of "openness" especially when Facebook Home is not so great. I also think that even if users install Facebook Home they are going to find a way to bring their favorite Google apps in the front page. It's not only matter of owning the home screen, it also has to have useful and nice apps.

    • Hi Vanton. I think you have a good point about bringing favorite Google apps to the front page. As far as I know, that is not possible with Facebook Home V1. As I wrote in the article, this is something I recommend Yahoo should do. Facebook Home V1 is so bad, there are lots of learnings for others trying it (or for Facebook's future versions). The fact that you can't even look at the time, the batter life, or notifications on the home screen (let alone your favorite apps).

      I agree that blocking Facebook Home would be a tough pill to swallow for Google who positions itself as so open. It would create a PR issue that they would have to manage. However, if a future version of Facebook Home is broadly adopted and it continues to bury Google apps deeper in the UI, this could impact Google's ability to monetize Android. This would also likely cause Samsung to fork Android more quickly negatively impacting Google revenue in a big way. I can't imagine that Google intended for any third party app developer to hijack Android in this way.

  • Hi Tony. I think the title of this article is misleading. It implies that Facebook is having success with Home, which it is not as you pointed out and as I explained in the article is NOT the case. The title changed a few times during the editing process and it looks like the wrong title was published. Thank you for your comment and for catching this.

    For clarification: I wrote mostly about Facebook's strategy with Home, not its current V1 app. I explained at the top of the article that that execution has been poor. I also explained what went wrong later in the article (in the section about what Yahoo! should do). Facebook has acknowledged publicly that V1 went wrong and that it is working on new versions. I don't know if Facebook will get it right but if they do and Google does not block it, it will spark a battle for the Android Home Screen.

  • Paul

    A few points here.

    Adding to the thread between you and Tony: a strategy does not equal a meaningful threat. Facebook certainly wants to become a full-fledged platform and is trying to muscle its way into being one, but it remains to be seen if people have any desire to use Facebook beyond its core competency as a social network. The underlying point here is that Facebook's land grab represents one approach to the eyeball game. At the end of the day, it may well be that different approaches work for different people, and the market is big enough for multiple approaches to succeed. And Facebook obviously does not have the broad web service strength that Google does. If the situation ends up playing out like that, then Google could actually benefit by partnering with Facebook and others to integrate Google services into these front ends.

    On Google: Google can not simply squash others trying to make a "Home" on Android, for two main reasons.
    First of all, it already has antitrust issues in some regions, and this strategy would obviously exacerbate them.
    Second, doing so would necessarily mean asserting even more restrictive control over Android, which would alienate important partners/customers that are already on the fence after the Motorola purchase and the Acer prohibition.

    Overall, it seems to me that Google's strategy is to see if Facebook Home and the like take off, and if they do, partner to make sure that Google services remain the service of choice within the Facebook Home platform.

    • Thanks for sharing your insights Paul. I think that the anti-trust issues you referenced are very real and probably the biggest issue for Google, should it choose to block Facebook Home. Bigger than the PR issues that are also real. Some Google lawyers are probably already trying to evaluate this risk.

      You mentioned that blocking Facebook Home could alliante other hardware partners. I think the opposite would be true. Device makers need to be able to differentiate their devices. As I referenced in the article, a key part of differentiation is the UI. With Facebook Home, all Android devices would look like Facebook phones – not exactly what device OEMs would want.

      I do think that Google should allow its device partners to customize the device UI. This is important for device makers and consistent with Google's monetization strategy. But allowing any third party developer to hijack the UI hurts both Google and device manufacturers.

  • Interesting article, but as of today, the numbers don't seem to indicate that Facebook Home represents a threat to anyone: Facebook app: 7,393,908 downloads on Google Play; Facebook Messenger: 855,382 downloads; Facebook Home: 20,090 downloads.

    • Hello Massimo. I agree with you. Facebook executed poorly as I referenced in the article. However I think that for as long as Google allows this, Facebook will try to fix it. This is what they have stated publicly. They clearly got some obvious things really wrong, like blocking key hiding key OS features that users need at the top level.

      Facebook got too greedy by pushing all its competitor apps too deep into the UI. A better implementation would be to allow the user to surface some apps to the top. This would improve adoption. Say I'm addicted to Whatsapp for messaging and Facebook Home makes it hard for me to use that app hoping that I will use Facebook Messaging instead. In this case I would not adopt Facebook Home. However if I'm allowed to surface Whatsapp and I'm also an active Facebook user, I may adopt Facebook Home. This would still be a win for Facebook as I would be using all other Facebook apps more, even if I don't use Facebook Messaging.

  • staska

    I've been reading about how someone or other will soon own mobile because they own the homescreen of the phone, for years now. And how they will monetize it with ads.

    The problem is that this line of thinking simply tries to move Web based paradigm to mobile. Owning a big part of Netscape homepage put Yahoo on top of the Web in the 90s. Owning, arguably, the most important piece of Yahoo's homepage real estate then put Google on top. And let both of them, and many others, to make a lot of money.

    Unfortunately, in mobile, owning the homescreen does not mean anything for your business prospects. Especially if you plan to monetize that ownership with ads. Just ask the owners of one of the most popular Android launchers –Nova. Or ask Nokia about Symbian, or Microsoft about Windows Mobile. All of them owned your phone's homescreen for years.

    I still have to see a single ad, or anyone to make any money from ads, on a phone homescreen. Never happened, I doubt it'll ever will.

    Mobile is monetized via superior apps and services, where 99% of ads are displayed. Owning the phone's homescreen only helps you to put your own apps and services in your customers face. But those services have to be very good, or your customer will move elsewhere. And it requires a lot of talent and money.

    Owning Symbian didn't help Nokia's OVI services suite at all, because OVI was crap. Owning Windows Mobile didn't make Microsoft into a mobile productivity app powerhouse.

    Putting mobile first and having the best search, e-mail and mapping apps/services out there, on the other hand, made Google a powerhouse on iOS. Android only gives an opportunity for Google to showcase their apps/services first. The reason they stay on top, is because their offerings are among the best in class. And where they aren’t, e.g. Google+, or Google Docs –Android doesn’t help much.

    Even owning one of the most popular mobile platforms today, is no guarantee of success for your own service, if that service is not up to par. Just look at Apple maps. Owning a platform may give Apple time to make Maps good enough eventually, but it’s a big question whether they will ever become more popular than GMaps, among users who care about this tuff, even on iOS. The same applies to G+ or Docs on Android.

    And talking about Facebook as big disruptor of anything, is just being blinded by their size. They have been around for how long? About 10 years? And all through that decade Facebook failed to disrupt anyone, except MySpace. Even on the Web.

    Yes, social is a very important part of modern Internet experience. Facebook owns a huge chunk of that, and makes good business from it. But that’s it.

    Despite of all the hype whenever Facebook launches anything new, is there any FB product besides their timeline (and that includes photos posted to the timeline), that really matters? Facebook search is a joke. I am still waiting for that first e-mail from someone@facebook .com. Messenger? Is it more important than Skype, or Whatsapp? Mobile Home is a failure. And I still have to get to uninstalling their mobile SMS/messaging app. Those bubble messages look cool at first, but get annoying real fast.

    PS. Getting back to that homescreen/modern smartphone UI thing. It’s interesting to watch people trying to invent something new, better than decades old desktop with icons. And fail every time. Even on Android, where you can experiment freely, the only thing that got beyond desktop/icons metaphor in any significant fashion, is clock/weather widget. Could desktop/icons UI, invented by Xerox back in the 70s, be the wheel of computing UIs? You can make it square, you can make it into the stick. But the only thing that really works, and will ever really work, is the round thing in front of your driver’s seat, that helps to steer the car in the direction you want it to go?

    • Hello Staska. You make some really good points. Clearly apps and services need to be good for them to be successful. This is necessary but not sufficient requirement. Apps and services (especially in mobile), also need to be easily discoverable. I'd like to counter a couple of the points you raised:

      Discovery of apps is MUCH MORE important in mobile than it is on the web. This makes the mobile home screen MUCH MORE important than the PC home page. This is because of the size of the display. The smaller the display, the deeper you need to stack apps in the UI and the more precious the top level real estate becomes. A lot of people (me included) have so many apps installed, that they can't find them easily other than searching for them by name. The apps that are on the top level get much more usage as a result.

      You wrote that it would be hard to make money from showing ads on the homescreen. I agree with you. However, this is not about showing ads on the home screen. It is about getting consumers to use their apps more so they can learn more about them. The more that Google knows about you (say because you use Gmail on your phone), the better Google can target you on the PC or any other channel. The more relevant ads Google can display, the more money they generate from advertisers.

      This is why the homescreen on mobile devices are so important to all the players in the ecosystem. If Facebook were to be successful with Facebook Home, pushing all other apps deeper into the phone, all other players in the mobile ecosystem would be negatively impacted.

  • Matt Conlon

    How does one become "a second class citizens"?

  • Matt Conlon

    Frankly, I think it's pretty brilliant… Facebook already has the fan base, I'm sure a percentage of Facebook users (probably pretty darn close to 100%) have mobile phones, most of those are smartphones. I'm willing to bet that the phone manufacturers step in and make their own products supersede Facebooks.

    I also think that ads are frustrating to enough people that a good number will not use it if there are ads. I, for one, will not.


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