19 Billion is a big number. Dr.Evil big. And like Instagram before it, the WhatsApp acquisition belies Facebook’s utter desperation for relevance, and in contrast to pundits’ breathless projections, signals a likely end to Facebook’s mobile survival.
If you don’t work for Facebook, and you’re not invested in it, you are probably comfortable considering the obvious signs that the Facebook social network has been revealing a lack of relevance.
As Facebook’s users age, and become associatively uncool, the network has become less a place where young, influential, upwardly-mobile users go to “hang out”, and more a place where they “reconnect”, get updates on high school reunions, and share the occasional cute cat picture with grandparents.
Facebook made sense in a web-browser universe, back when digital social connections were still new, few, and cumbersome. But users don’t live in that world anymore, and have increasingly numerous and convenient options for connecting. This has forced Facebook scrambling to find relevance. Literally breaking itself into digestible mobile parts only to find themselves competing with a million other apps with similar attributes.
And it’s exactly this desperate scramble that has Facebook blowing 20 billion dollars on 2 mobile apps.
Mobile is… a perfect storm – one specifically designed to remove dominant players from power.
Yes, I’ve seen the amazing numbers and projections. Every investor has a slightly wide-eyed, positive spin on the Whatsapp deal, lining trajectories of popular mobile apps next to the web’s old guard. But I’m still shaking my head, certain the cards are not stacked in Facebook’s favor. Not because the current numbers aren’t impressive, but because those numbers exist in the eye of a hurricane. Those numbers only make sense so long as the landscape remains recognizable, the natural laws consistent. So long as we don’t acknowledge the inevitability of exponentially disruptive players.
The mobile world is fundamentally different than the one Facebook was born into. The metabolism of business is rapidly increasing before our eyes. There are dominant and unpredictable forces swirling around every business today – let alone those that exist solely on objects of convenience, like mobile apps.
The democratization of development and distribution makes the mobile app ecosystem a whole new world. Never before in history have there been so many competing software developers with so much power to utterly disrupt. The distance between market dominance and failure is now one person, and a day.
Add to this that the very existence of an app store as the portal of distribution, concentrates attention on the value of new discoveries. On trying new apps that might be better than, say, whatever you use today. Face it, app stores are like news outlets; old news isn’t good for business.
Face it, app stores are like news outlets; old news isn’t good for business.
And here you have a perfect storm – one specifically designed to remove dominant players from power. Once you’ve enjoyed a run, the entire ecosystem is optimized to make room for the next thing.
Take the case of Dong Nguyen, a developer in Vietnam who created FlappyBird. In a few days. Single-handedly. One guy. Unpredictably it quickly became the most downloaded game in the iOS app store, and the Android version, released later, was catching up. Was that predictable? Did Rovio or King see that upset coming? How many people stopped playing Angry Birds to addictively play Flappy Bird? Lucky for them Nguyen inconceivably pulled the app from both platforms. A virtual get out of jail free card for every other contender. But see, it was predictable. Because this is the very nature of the mobile app landscape.
Facebook’s 19 Billion dollar deal does not appear to take into account the high likelihood – the inevitability rather – that some deceivingly simple upstart app, like WhatsApp and Instagram before it, will come along and do something different, better, cooler. Just enough that it gets attention, gets downloaded, spreads, and eclipses or replaces the old ones.
Mobile apps are not platforms, they are disposable instances, they are trends. The sturdy limitations that held Microsoft Office in place for so long do not exist here. Nor are the ones that have continued to keep Facebook warm on the web. Every popular 3rd party mobile app is destined to face an unprecedented, massive and relentless onslaught of unpredictable new ideas from divergent competition.
I’m not sure how many multi-Billion dollar app acquisitions Facebook is prepared to close over the next 5-7 years, but I can tell you with absolute certainty that WhatsApp is far from the last app acquisition Facebook will have to make to retain a position of relevance in mobile users’ lives. Far from it. If indeed sheer acquisition of disruptive apps is to remain the sole successful basis of Facebook’s mobile strategy – they’re on a very expensive treadmill.