Facebook's Biggest Competition: Mobile Platforms

When the Facebook platform launched two years ago, thousands of developers flocked to participate in a land grab opportunity. Two years later mobile platforms appear to be most effective at attracting entrepreneurial teams of application developers. Steve Ballmer, Microsoft’s CEO, has famously emphasized the importance of developers (see video here). Any successful platform needs to attract developers and Facebook has been especially effective at doing so.

Through Facebook developer garages and the fbFund, Facebook has attracted the attention of many developers but since the launch of last year’s iPhone, things have changed. In today’s New York Times, Jenna Wortham writes about the new business model: “Sell the apps, then sell your company.” In February of last year I wrote that the platform wars were on but at the time I didn’t foresee the impact that the iPhone would have.

Developers now have a countless number of mobile application platforms to build on. Whether it’s the iPhone, Android, Nokia’s Ovi, or yesterday’s greatly hyped Palm Pre. Simply put, there has never been a better time in history to be a developer. What’s not as easy is being the owner of a development platform. Facebook presents a great opportunity for application developers but now there are countless other platforms that provide equal if not greater opportunities.

For mobile developers, the best aspect is that revenue is based on the actual sales of software. That’s rapidly evolving as well though. With the new iPhone model, applications will allow “users to buy subscriptions to applications and easily buy add-ons like access to higher game levels or additional city guides”, Jenna Wortham writes. Facebook’s payment platform is most definitely an attempt at being the payment mechanism behind many of these micro-transactions but the early stage Facebook payment platform will face fierce competition from Apple.

With all the hype around mobile platforms, how does Facebook keep the buzz going? Ultimately the company just continues to push forward. While mobile platforms may be this weeks press fetish, Facebook’s growth doesn’t appear to be slowing. The company could soon surpass 250 million users (if it hasn’t already) and should easily surpass 300 million by the end of the year. The overall pie is getting bigger for developers but Facebook needs to ensure that they continue to be a large piece of that pie.

If Facebook can mange to make Connect the social backbone of the emerging platforms (especially mobile), there’s a good chance that Facebook’s piece of the pie will continue to expand. This afternoon (or morning depending on what coast you are on), we will hear more about what Apple plans on providing to developers. Facebook’s new job: make it through this week and then announce something that will keep the developers truly excited.

How do you think Facebook can most effectively compete with the mobile platforms? Do you think that they should even be concerned considering their continued growth? What if Facebook uses the new $200 million influx of capital to launch their own mobile platform?

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