Facebook’s HTML5 Mobile Platform Strategy Has Risks, But It Has No Other Choice

Facebook’s plan to build a rich HTML5 version of its site complete with apps from its biggest third-party developers should be no surprise. We’ve written about this strategy several times here, here with more detail and analysis and here, when the company’s chief technology officer Bret Taylor alluded to the importance of HTML5 in January.

Basically, Facebook has become so large and powerful that its interests no longer really align with those of the two companies managing the two emerging and dominant smartphone platforms — Google and Apple. All three companies want a 30 percent revenue share from their developer ecosystems, whether that’s just to cover platform operating costs, drive value for their core product (hardware, search, advertising, etc.) or become a significant stream of future income. Apple also chose Twitter over Facebook as the social layer for iOS after the relationship between the two companies faltered.

At the same time, developers that once saw the Facebook canvas as rife with opportunity are moving to iOS and Android. However, fragmentation between devices and operating systems has made the creation of mobile apps challenging for them.

So Facebook sees an opportunity through HTML5 to create a way in which a developer can reach all consumers with a single app — provided that it can help solve the distribution, performance and monetization problems that have made the mobile web less attractive compared to native apps.

TechCrunch found additional confirmation of this strategy this week (see right) after the blog received a leaked set of documents outlining the company’s mobile plans. The new details the site uncovered include:

  • Eighty or so third-party developers are working with Facebook to create applications for this platform, including Zynga and The Huffington Post
  • The initial approach is to use mobile Safari on iOS devices
  • Essentially, it works like this: Load the Facebook mobile web site and users will be able to access a drop-down menu for apps. A Facebook wrapper will deliver the user to the app, providing some basic functionality as well as the ability to use Credits.

Facebook responded, stressing that it isn’t building a competitive platform to iOS. “We don’t expect developers to choose between HTML5 and native apps,” the company says. “We expect they will choose both, just as we did. We view HTML5 as a technology, not a platform.”

Yet by lacing this HTML5 version of the site with Credits, Facebook is in effect creating an alternative monetization scheme for mobile developers.

Taking a step back, there are definitely opportunities for Facebook to provide an attractive mobile platform. However, even though the company has long prided itself on being younger and more agile than competitors, this is a case where being too young has its costs. Facebook’s options are limited by the fact that it doesn’t have ownership of lower levels in the technology stack like the OS or hardware. Google laid the groundwork for Android when it bought Andy Rubin’s company in 2005 and Apple was working on the iPhone years before its launch in 2007 — when Facebook had just 50 million users.

That said, here are some of the ways Facebook could offer more to mobile developers, and then some of the ways where it might fall short:

Opportunities

Facebook could finally be a decent distribution solution for the long-tail of mobile apps that don’t have a top 100 ranking: Navigating the iOS store is strangely anachronistic. It’s almost like the human-curated, directory-based approach Yahoo pioneered in the 1990s. Developers at the top of the charts get a disproportionate amount of downloads — sometimes more than 1 million a day at this point — and then the number of installs drops dramatically the farther down the list an app falls.