Free Calling For iPhones: Is This The Real Facebook Phone?

fbmessenger

Facebook Messenger app

After testing a free voice calling feature for its Messenger app in Canada recently, Facebook has quietly made the feature available in the U.S. as well–to iPhone users, anyway. Now, according to The Verge, iPhone users can make free calls using a WiFi connection, with no carrier data charges, or using their data plan.

It’s hardly the first free voice calling app. Google Voice has offered this for a long time, and there’s also Gmail Chat. Neither is limited to iPhone users or, of course, Facebook members. There’s also Skype, which allows you to make free calls to other Skype users.

Given that most people with a cell phone have voice minutes by default, often so many that they don’t end up using them up each month, this isn’t something a lot of people are probably clamoring for. But for Facebook, it offers several benefits. In fact, it could provide nearly all of the benefits of the long-rumored Facebook phone–the notion of which was quashed by none other than Facebook CEO Mark Zuckerberg himself last year:

* People will end up using Facebook more. In other words, it’s one more way, along with yesterday’s announcement of its Graph Search service, that Facebook is making itself not just entertaining, but useful. That’s key to keeping the 1 billion-plus people from gradually wandering away from what is, for all its appeal, the biggest time-waster online.

* It’s another mode of communications. And communications–that is, being social–is what Facebook is all about.

* It may be especially appealing to young people, who often have limited voice or data plans. And Facebook, whose membership now tends to be older than newer rival services, needs to keep young people engaged.

* It’s a way for Facebook to make sure people turn to the company’s apps on their mobile devices rather than to rivals’. Facebook has recently managed to ramp up its mobile ads, to as much as 20% of overall ad revenues. So this is less of a concern when it comes to making money directly through apps. But Facebook remains in catch-up mode in mobile–for pete’s sake, its biggest project in years, Graph Search, has no mobile component at the outset. So it has to make sure it offers useful features, especially those native to smartphones and tablets, or it could gradually become less relevant to the rising number of people for whom the phone is their computer.

Nobody really needs an actual Facebook phone, because apps make every phone a Facebook phone. Free voice calling is just one way to make sure it remains that way.

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With Graph Search, Can Facebook Kill LinkedIn, Yelp–Even Google?

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Facebook CEO Mark Zuckerberg introduces Graph Search (Photo: Robert Hof)

From my Forbes.com blog The New Persuaders:

Facebook took pains today to tell the world that its new social search serviceGraph Search, is only a very limited tool that it will roll out very slowly over a period of months and years.

But CEO Mark Zuckerberg and his search staff couldn’t help but reveal their enthusiasm for the vast possibilities. For all their professed modesty, what struck me at the company’s press event introducing the service was how specific and broad-ranging Zuckerberg and his Graph Search leaders were about what it could provide: just about everything, potentially, that every company from LinkedIn to Yelp to Foursquare to Match.com to … yes, even Google provides today.

That’s an exaggeration, of course, that even Facebook folks surely didn’t intend. All of those companies have distinct, well-developed services with extensive user bases that are unlikely to shrivel up no matter how good Graph Search turns out to be. In most cases, they will probably retain a durable advantage for years to come. And as Zuckerberg said, it’s very, very early for Facebook search, and search is a devilishly complex discipline to do well.

Still, to hear it from Facebook itself, Graph Search will offers ways to provide similar services, sometimes in potentially easier and more effective ways:

* Recruiting: One of the first examples Facebook provided today was that Graph Search could help in finding qualified candidates for jobs. For instance, Lars Rasmussen, the Facebook director of engineering who heads the Graph Search team, mentioned that he could find people from NASA Ames Research Center who are friends of Facebook employees.

As investors, who bid up LinkedIn’s share a fraction today, no doubt recognize, that company has a pretty good if not exclusive hold on recruiters. And given that finding friends who worked somewhere is a rather specific subset of qualified candidates for a position, there’s not much chance recruiters will abandon LinkedIn for Facebook anytime soon. But Facebook, already used in various ways by recruiters, could siphon off activities that might otherwise have gone to LinkedIn. … Read more at The New Persuaders. But to conclude …

So, to answer the question in the headline: No, Facebook won’t kill any of these companies, certainly not anytime soon. They’re too strong, Facebook has too much still to build and then to prove, and rarely does a company kill another healthy company no matter how good its products are.

Investors may be thinking as much, as they sold Facebook shares to the tune of a 2.7% drop in price today. But if anyone doubted Facebook’s ability to keep disrupting the status quo, they surely shouldn’t doubt it anymore. Even with its baby steps into the search business, Facebook has again set new terms of engagement in the battle for the soul, or at least the cash register, of the Internet.

LIVE: Facebook Unveils Graph Search–Its Long-Awaited Internal Search Engine

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Facebook CEO Mark Zuckerberg at the introduction of Graph Search (Photo: Robert Hof)

Ever since Facebook invited piles of press people to an event this morning to “come see what we are building,” speculation about what it will reveal has reached a fever pitch.

Update: It’s all about search! See below for details. But for what it’s worth, investors are not impressed. Facebook shares are down 2% in midday trading. No doubt that’s a short-sighted view–this socially infused search service is a big deal, if only to show how Facebook will keep engaging people more and more deeply, not to mention provide a foundation for the kind of search ads that made Google king of the Web–but that’s the market for you.

There must be a couple hundred press here, plus a crowd of Facebook employees standing in the back of the room–a sure indication that Facebook considers this a big deal.

And now we are underway, with CEO Mark Zuckerberg introducing us once again to Facebook’s mission and the social graph. First he goes into Facebook’s early history, before the news feed that now dominates the service.

Now he’s introducing the third pillar of Facebook’s service beyond the news feed and Timeline. What’s most interesting is graph search.

So what is graph search? It’s not Web search. We’re not indexing the Web. We’re indexing our map of the graph. There are more than a trillion connections in this graph, with billions more added every day–likes, comments, photos, etc. Indexing this is a really hard problem and we’ve been working on it a long time.

Graph Search is privacy-aware, he says. Every piece of content has its own audience, and most is not public. You can only search for content that has been shared with you–a very tough problem to solve.

Let’s say you do a Web search for hip hop. You get links. Graph Search is different–it’s intended to provide answers: Which of my friends are in San Francisco?

One of the big design problems we had to solve was how to make this natural. We’ve come up with an interface we think works. The answer is filters–not! That’s a joke–he shows a screen full of filters that look ridiculous, of course, because they can’t scale up.

He shows a video of queries that show how they come up with answers as you type in words.

For this first beta version, he says, Facebook focused on four use cases: people, photos, interests, and places. There’s a lot more, but these are especially useful. …

Read about the rest of the event at The New Persuaders.

5 Reasons Why Facebook Shares Have Soared Past $30

Mark Zuckerberg, founder and CEO, shows off th...

Facebook CEO Mark Zuckerberg (Photo: Wikipedia)

From my Forbes.com blog The New Persuaders:

After languishing ever since Facebook’s mostly botched initial public offering last May, the social network’s shares are up more than 5% today, moving past $30 a share for the first time since July. Why the sudden investor interest in what was one of last year’s biggest disappointments in the business world?

* Something new is coming: I and a crowd of other journalists have been invited to a press event on Jan. 15 to “come see what we are building.” That could be anything, from new kinds of ads (though that’s not the usual thing Facebook engineers mean when they talk about what they’re building) or a mobile phone (very unlikely, since CEO Mark Zuckerberg put the kibosh on the idea awhile ago) to a search engine, a music service, or an expanded e-commerce initiative.

Or, the most likely of all, something entirely different–possibly several things, to read probably too much into the invitation’s wording. In any case, it’s enough of an event that investors are likely intrigued and want to get in ahead of an announcement that at the least will get a lot of coverage.

* Ad revenue growth is accelerating again. In its third quarter, Facebook surprised investors with a 36% jump in ad revenues, sending its shares up 20% the next day. Although mobile ad revenues are a big part, a new ad exchange and an ad targeting program called Custom Audiences also appear to be getting traction.

* In particular, Facebook appears to have a good start on solving a key issue during the IPO: mobile advertising. …

Read the complete post at The New Persuaders.

5 Reasons Why Facebook Shares Have Soared Past $30

Mark Zuckerberg, founder and CEO, shows off th...

Facebook CEO Mark Zuckerberg (Photo: Wikipedia)

From my Forbes.com blog The New Persuaders:

After languishing ever since Facebook’s mostly botched initial public offering last May, the social network’s shares are up more than 5% today, moving past $30 a share for the first time since July. Why the sudden investor interest in what was one of last year’s biggest disappointments in the business world?

* Something new is coming: I and a crowd of other journalists have been invited to a press event on Jan. 15 to “come see what we are building.” That could be anything, from new kinds of ads (though that’s not the usual thing Facebook engineers mean when they talk about what they’re building) or a mobile phone (very unlikely, since CEO Mark Zuckerberg put the kibosh on the idea awhile ago) to a search engine, a music service, or an expanded e-commerce initiative.

Or, the most likely of all, something entirely different–possibly several things, to read probably too much into the invitation’s wording. In any case, it’s enough of an event that investors are likely intrigued and want to get in ahead of an announcement that at the least will get a lot of coverage.

* Ad revenue growth is accelerating again. In its third quarter, Facebook surprised investors with a 36% jump in ad revenues, sending its shares up 20% the next day. Although mobile ad revenues are a big part, a new ad exchange and an ad targeting program called Custom Audiences also appear to be getting traction.

* In particular, Facebook appears to have a good start on solving a key issue during the IPO: mobile advertising. The big kicker in that third quarter was mobile ad revenues, which hit $150 million, or 14% of revenues, from almost zero just six months earlier. As Zuckerberg said during the third-quarter earnings call, “I want to dispel this myth that Facebook can’t make money on mobile.” In particular, ads in mobile news feeds are working for advertisers because they look more like a natural part of what people are already looking at. …

Read the complete post at The New Persuaders.

LIVE: Facebook Shares Soar As Q3 Ad Revenue Growth Accelerates

DAVOS-KLOSTERS/SWITZERLAND, 30JAN09 - Mark Zuc...

Facebook CEO Mark Zuckerberg (Photo: Wikipedia)

From my Forbes.com blog The New Persuaders:

After a rocky several months following its May IPO, Facebook finally provided some good news today as it reported third-quarter financial results that outpaced Wall Street expectations.

The key number: 36%. That’s the rate at which advertising revenues grew. And it’s noticeably higher than ad sales growth in the second quarter, which had flagged at 28%. Excluding the impact of foreign currency changes, ad sales would have risen 43% in the third quarter.

Mobile revenues, a key metric for a company that until recently had zero mobile ad revenues and offered little of note to its mobile users, were 14% of the total $1.09 billion in ad sales.

The other key number: 9%. That’s how much shares are rising in after-hours trading. Shares of FB rose a little less than 1%, to $19.50, in trading today. That’s still only a little over half of the IPO price.

* Update: Make that 20%+. After sleeping on it, investors like the results even better the next morning.

Facebook still faces many challenges, such as the need to provide a better mobile experience for users and advertisers. And thanks to rising expenses, including stock compensation and related costs–up 64% from a year ago–it’s actually losing money on a GAAP basis. But if advertising is returning, whether it’s from more interest in its social and mobile ads, in the Facebook ad exchange that’s getting a lot of attention, or even in the new Gifts e-commerce service, that’s good news.

We’ll hear more from CEO Mark Zuckerberg shortly when Facebook conducts its analyst earnings call at 2 p.m. Pacific. I’ll blog the highlights here, but you can also listen to the livestream.

The call begins. Zuckerberg will talk about the vision and strategy of the company–make the world more connected, etc. Three pillars to the strategy:

1) Build the best mobile product. This is the most misunderstood pillar. Mobile allows us to reach way more people, people spend more time on mobile devices, and monetization should be even better than on the desktop.

2) Improve the Facebook platform.

3) Strong monetization engine. On mobile, ads will be more like TV–more integrated into the core product experience, rather than on the side. We’re starting to see better ad products for people and better results for advertisers.

I want to dispose of this notion that we can’t make money on mobile. Until recently, Facebook didn’t even try. …

Read the rest of Zuckerberg’s comments and his Q&A with analysts at The New Persuaders.

Is The Long-Awaited Facebook Ad Network Here? Not Yet, But Here’s An Early Glimpse

Illustration of Facebook mobile interface

Facebook mobile interface (Photo: Wikipedia)

From my Forbes.com blog The New Persuaders:

For years, advertisers have been wondering when Facebook would create its own ad network like Google’s AdSense, which syndicates ads across thousands of websites. Google grossed more than $10 billion last year on that business.

Now we’re getting a hint that Facebook may be preparing to flip the switch on its own ad network. Today, the social network said it’s testing Facebook ads that use its own data to target ads to Facebook users as they land on other websites and on mobile apps.

The company isn’t calling it an ad network, because for now it’s just a test. A Facebook spokesperson says it’s using outside Apple iOS and Android ad exchanges to run the test, not its own technology, but it is an ad network in function. So you can bet that if it works–and Facebook hasn’t decided how long the test will be conducted–a bona fide Facebook ad network won’t be far behind.

Details are sparse, since Facebook isn’t saying which advertisers, publishers, and mobile ad exchanges are involved in the test. It’s a “very small number” of each, says Facebook. Most of the ads, which will be standard banners and “interstitials” that run just before a web page loads, will likely be for app installations. The main value for marketers and apps is that Facebook’s user data on age, gender, and “likes,” offered freely by its members, is usually considered to be more accurate than other kinds of data collected on people as they browse online.

This is the latest and still relatively limited move by Facebook to expand its ad business beyond Facebook.com. In June, it started placing ads on social games site Zynga.com, the social games siteed on Facebook. The same month, it introduced the Facebook Exchange, which lets marketers target customers and prospects with ads on Facebook using their own data, not just Facebook’s.

This is also a further push into mobile advertising, the lack of which has been a thorn in Facebook’s side since its less-than-blockbuster initial public offering in May. Separately today, Facebook announced a new version of its  Pages Manager mobile app that will let businesses buy a new mobile ad format called promoted posts directly from their mobile phones.

Facebook CEO Mark Zuckerberg said last week that he thinks mobile will be even bigger for Facebook’s ad business than the Web. Today’s announcement shows it’s more than just talk.

But investors and advertisers will still have to wait awhile longer for the full-fledged Facebook ad network–and the big boost in revenues that they hope will come with it.

Facebook CEO Mark Zuckerberg: We Burned Two Years Betting On Mobile Web Vs. Apps

English: Mark Zuckerberg, Founder & CEO of Fac...

Photo: Wikipedia

From my Forbes.com blog The New Persuaders:

Facebook CEO Mark Zuckerberg hasn’t said much, if anything, publicly since the No. 1 social network went public in May. But oh, how much has changed since that day. Not only did the IPO fall flat, but Facebook is now dogged by slower growth perhaps partly due to its late start on mobile advertising.

Today, Zuckerberg went public himself at the TechCrunch Disrupt conference in San Francisco. Clearly the big “get” for the conference, Zuckerberg was in his element at the conference, which is aimed at tech startups and the software developers creating them. In a wide-ranging and surprisingly revealing interview with TechCrunch founder Mike Arrington, who has since become a venture capitalist, Zuckerberg said Facebook lost two years betting on mobile Web technology instead of native iPhone apps but said he thinks mobile will be even bigger than the Web for Facebook in terms of advertising.

Investors liked what they heard. Facebook shares rose 3.6% in after-hours trading, breaking $20 a share, on top of a 3.3% rise on Tuesday before his talk.

Here’s the interview, edited slightly for clarity and my inability to catch every single word the fast-talking Zuckerberg utters:

Q: You went public on May 18 and the stock has lost roughly half its value.

A: Just get right into it!

Q: Would you have done anything differently on the IPO?

A: The performance of the stock has obviously been disappointing. But the commitment we made was to fulfill this mission to make the world more open and connected.

The key will be how we do with mobile. A lot of stuff has changed in six months since we’ve been in the quiet period.

Literally six months ago, we didn’t run a single ad on mobile. So people can underestimate how good mobile can be for us. It’s the main thing that’s fundamentally misunderstood. For one, there’s just more mobile users–5 billion people have cellphones in the world. Second, they’re spending more time on it. We’re already seeing people more likely to be daily active users on mobile. And those stats are before the new iOS app. And third, we can have better advertising on mobile, make more money.

Q: You make money to build great services rather than build services to make money. Do you really mean that?

A: We are a mission-driven company. In order to do this, we have to build a great team. And in order to do that, you need people to know they can make a bunch of money. So we need a business model to make a lot of money.

Building a mission and building a business go hand in hand. The primary thing that excites me is the mission. But we have always had a healthy understanding that we need to do both.

Q: What about the stock causing morale problems?

A: Well, it doesn’t help. But first, Facebook has not been an uncontroversial company in the past. So people are fairly used to the press saying good things about us and bad things about us.

What really motivates people at Facebook is building something that’s worthwhile, that they’re going to be proud to show to friends and family.

We also haven’t done much on equity to incentivize people. The way we do compensation is we translate the amount of compensation we give you into shares. [So employees get more shares if the stock price is down, thus similar compensation, thus the stock price doesn't mean as much as it might appear.]

Q: I’ve been rough on the company on mobile products.

A: We were very self-critical too.

Q: Is mobile a strength or weakness for Facebook?

A: There are more users, they spend more time on Facebook, and we’re going to make more money on mobile ads. There are huge things we can do to move the needle. Mobile is a lot closer to TV than [to] the desktop. We’ve had right-hand-column ads and it’s been great, a multi-billion-dollar business.

But on mobile, we can’t do that. It’s clearly going to have to be different. We’re seeing some great mobile ad products being developed. There’s a huge opportunity. The question is getting there.

Clearly we’ve had a bunch of missteps there. The biggest mistake we made as a company was betting too much on HTML5, because it’s just not there yet. We went for this approach, an internal framework called Faceweb. We just couldn’t translate it to mobile with the quality we wanted.

We had to start over and rewrite everything to be native. We burned two years. It may turn out it was one of the biggest if not the biggest strategic mistake we made.

Two years ago, we decided to bet completely on HTML5. We believed that because it used the same technology as the desktop, we thought it could improve. But it wasn’t good enough. We realized the only way we could get there was to go native.

Q: Did you realize the previous Facebook mobile app sucked?

A: Yeah, it was not where we wanted it to be. We just decided to ship the same features as before, but faster. But in parallel, other teams have been building new features. Over the coming weeks and months, we can expect to see a lot of the cool stuff. …

Read the complete post at The New Persuaders.

Benchmark VC Matt Cohler: Mobile Ads Will Be Even Better Than Web Ads

Image representing Matt Cohler as depicted in ...

Image by Facebook via CrunchBase

From my Forbes.com blog The New Persuaders:

Despite rising doubts about whether mobile advertising will ever amount to much, Benchmark Capital partner Matt Cohler says he’s more jazzed than ever about the prospects.

In an interview with TechCrunch founder Mike Arrington at the TechCrunch Disrupt conference this morning in San Francisco, the former vice president of product management at Facebook said he has made zero investments this year, though he wasn’t entirely clear why except to say he made more than the usual number last year. But he said he’s looking actively for opportunities in “mobile marketplaces,” as well as products and services that use the smartphone as a “remote control for your life.” Here’s what else he had to say, in edited form:

Q: You haven’t made any investments lately. Why?

A: I haven’t made any investments this year. Last year I made more than a typical venture investor would.

It wasn’t a single specific decision. We’re at an interesting moment in time where aspects of various platforms are starting to shift. But I’ll do it if the time is right.

Q: Do you regret not making some investments?

A: I’m sure I passed on some things that will probably be successful.

Q: You criticized Groupon awhile ago when it was hot. That looks pretty smart two years later. But you have invested in a deals site in Brazil.

A: I think daily deals are a good idea. Any ad people view as content is a good ad, and that’s true for daily-deal ads too. But I’m not sure it’s smart to build a company around that one thing. Groupon has some interesting assets. The question is what can it do with them? …

Read the complete post at The New Persuaders.

Lots Of Blame To Go Around For Facebook’s IPO ‘Debacle’–But It Doesn’t Mean A Thing

Facebook CFO David Ebersman. (Photo: Wikipedia)

From my Forbes.com blog The New Persuaders:

When anything goes wrong, we just love a scapegoat, don’t we? Today’s scapegoat in the business world is David Ebersman, Facebook’s chief financial officer, who New York Times writer Andrew Ross Sorkin says is completely, solely, and utterly at fault for the social network’s underwhelming initial public offering and subsequent swoon in its stock price to less than half its IPO level.

Sorkin, as well as others, say Ebersman’s insistence on a higher stock price and especially on issuing more shares shortly before the offering were the key reason Facebook’s post-IPO shares not only failed to rise but steadily fell–vaporizing some $50 billion in shareholder value in the past 90 days.

But Ebersman is hardly the only culprit in the IPO. There’s also:

* Facebook’s underwriters, including Morgan Stanley and J.P. Morgan Chase. Not only did they go along with and even encourage the pre-IPO hype, but recently they cut their target prices for Facebook, contributing to today’s slide that knocked shares to under half the IPO level.

* Facebook investors. Business Insider’s Henry Blodget, who knows a little something about Internet stock dynamics, says investors willfully ignored both Facebook’s own warnings about advertising revenue uncertainties and CEO Mark Zuckerberg’s letter to, yes, investors, that he would focus on building Facebook’s services over maximizing its profits.

* Not least, CEO Mark Zuckerberg. After all, the buck (or in this case, 50 cents) stops here. While finances are probably at least third on the list of his concerns, behind Facebook’s services and its employees, a CEO ultimately is responsible for such a signature event in a company’s life.

Still, regardless of whom you might think is most culpable, in the end it probably will have little impact on Facebook’s prospects. That’s because there’s an even more fundamental reason to question the singling out of Ebersman: Perhaps Facebook’s IPO wasn’t really a debacle after all. …

Read the rest of the post at The New Persuaders.

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