In a bid to catalyse app development on its mobile web platform, Facebook has announced that it would be participating in industry wide initiatives intended to support app development, focusing on technology standards and for enabling mobile payments.
– Operator payments integration: Facebook said that it was working with mobile operators to streamline the flow of payments, so that the number of steps which are needed to complete operator billing based transactions in mobile web apps could be minimised. The company has joined telcos such as AT&T, Deutsche Telekom, Orange, Telefónica, T-Mobile USA, Verizon, Vodafone, KDDI, SOFTBANK MOBILE Corp, to automatically enable payments when apps integrate Facebook Credits via the Pay Dialog into their apps.
Speaking at the Mobile World Congress in Barcelona, Facebook CTO, Brett Taylor, said that the payments experience of the mobile web was broken and that operator billing support, requires SMS device verification, which takes users outside of the normal flow of an app, while developers have to integrate with “hundreds of APIs” to support operators globally. He said that the new system will remove the need for the SMS verification step for the “vast majority” of customers, while providing developers with a single SDK to get global reach with “very, very simple” technical verification.
Our take: This could easily pave the way for eliminating device based App Stores from the system, and for enabling a direct revenue sharing model between Facebook, developers working on its platform and mobile operators. So, to exemplify, Zynga could build a game on Facebook, for which additional levels or virtual goods could be purchased directly through operator billing, without the need to charge it to Apple or Google’s in-app billing. Presently, developers have to share part of the revenue with these app stores. This also means that users without credit cards will be able to transact on the platform, generating more revenue. Operators, who’ve more or less become dumb pipes specially in markets with large smartphone penetration, will get lured towards a monetization opportunity. It should, however, not be at the cost of net neutrality.
– Extending Open Graph To Android: Facebook also wants to aid discovery on the mobile web platform, and had already deployed open graph apps on its iOS and mobile web apps, to address the issue. At the MWC, it has also announced that it will extended open graph support to Android. Open graph apps that share updates on timeline allow Facebook users to discover new apps.
– Banking on HTML5: According to Facebook, the other major cause of worry for developers is platform fragmentation, requiring different app versions for different devices. To address the problem, Facebook is working with “over 30” device makers, operators and developers through a W3C community group called Core Mobile Web Platform, with the intention to “author and evangelise and prioritise” the development of HTML5 mobile web standards. Companies participating in the initiative include Samsung, HTC, Sony, Nokia, AT&T, Verizon, Vodafone, Orange, Telefonica, KDDI and Softbank. Facebook also highlighted Ringmark, a testing suite intended to monitor how devices comply with the new HTML5 standards.
Our Take: Facebook wants to become an ecosystem rather than just being a part of it. By taking a stand in favour of device/platform agnostic mobile web based app development, it wants to chart out a more direct path in consumer interaction, bypassing walled gardens. It wants to capitalise on mobile, which, as per its IPO filing, has not been much of a revenue source. The company would be looking towards becoming a major mobile player, with the implementation of these announcements.