TECH
04/11/2013 05:19 pm ET Updated Apr 11, 2013

Facebook Home's Ultimate Goal: Ingesting Your Messages

Mark Zuckerberg has staunchly rejected the notion that Facebook Home, the social network’s new Facebook-ified smartphone software, is a “phone.”

In a sense, he’s right: Home isn’t a phone so much as it’s a three-by-five-inch messaging center designed to get the world hooked on chatting via Facebook.

The social network’s foray into smartphones underscores a push to make every interaction with phones into an interaction with Facebook. But more specifically, Home marks an effort to make Facebook the hub for all conversations. On a phone that puts Facebook front and center, Facebook has put messaging front and center.

Zuckerberg asserts that messaging is what people want, telling Wired, “the big stuff that we’re seeing now is sharing with smaller groups."

Yet tech industry analysts note that the sooner people channel their chatting through Facebook, the sooner Facebook can turn messaging from communication between friends into a moneymaker that involves brands. More messaging will give Facebook more data it may use to provide advertisers with personal, personalized ways of interacting with its members.

"They're just trying to make sure that you don’t use anyone else's messaging service," said Carl Howe, an analyst with the Yankee Group, of Home's messaging capabilities. "They make it so convenient that you would never think about using what are actually very popular other services ... Once you're really invested in their messaging, maybe you won't mind as much when they start showing you ads on your messaging as well.”

Facebook did not respond to a request for comment.

In the version of Home that launches Friday, the most compelling offering -- and greatest differentiator -- is a feature dubbed “chat heads.” The chatting tool combines Facebook messaging with texting, and replaces friends’ names with their Facebook profile photos. The circular chat heads pop up on the screen with each new incoming message, and allow people to open and answer their messages without exiting whatever app they’re using.

“Messages reach you no matter what you're doing -- whether you're checking email, browsing the web, or listening to music,” wrote Facebook in a press release. When users first open Home, Facebook encourages them to log into Facebook so they can “keep chatting no matter what you're doing.” It’s a pitch that sounds almost as much like an order as an offer.

Home ultimately lets Facebook interrupt whatever activity a user might be doing, and chat heads ensure that any action on a phone can instantly become Facebook-focused.

“Messaging carries that Facebook experience across other apps,” said Chris Silva, an analyst with Altimeter Group, a research and advisory firm. “If … you leave the Facebook app to go to Chrome or some other app, messaging is still there at the forefront. It becomes a lot more persistent in the interface than any other messaging has been to-date.”

Beyond the convenience and prominence of messages on Facebook's software, the service also stands to gain users by virtue of being budget-friendly. Much like Apple’s iMessage or BlackBerry Messenger, chat heads bring together text messaging and Facebook’s own chat service, making them appear interchangeable. But while each text leaves users one step closer to exceeding their monthly limit, Facebook Messages draws from people’s more generous data allowances. Data show that given the option between the two, people will opt for messaging apps. This trend to replace texting with messaging isn’t one being cheered by carriers, who, according to Ovum data obtained by the Wall Street Journal, lost $23 billion in text messaging fees by the end of 2012.

Analysts say Home’s spiffy messaging tools suggest a plan to deliver new forms of advertising that more closely target members' behavior.

“Gmail was the Trojan horse to get us hooked on Google services, from which they were able to advertise to us, mine our data and create really detailed profiles of who we were,” said Silva. “Messaging tends to be the Trojan horse in these situations. It was for Google. It probably will be for Facebook.”

Facebook’s Messenger app currently gives people the option to attach location information to each post. Next, say experts, the social network might analyze the content of messages to serve up ads targeted to each conversation, much like Gmail. An exchange via Facebook Messages about feeling lonely after a breakup and hoping to find a new love interest could yield banner ads from online dating sites, matchmaking services or therapists.

Facebook is not only embracing a Google-like approach, it’s also using Google’s own Android software, on which Home is based, to conquer a new frontier of mobile advertising. Though Google is chasing the same advertising dollars as Facebook, the company’s highly-publicized commitment to keep Android open and free for people to customize leaves them little ability to thwart Facebook’s plan to leverage Google’s own software against its rival.

Advertisers might also contact users directly via messages. Facebook has recently tried charging people to guarantee that a message to a stranger arrives in her Facebook inbox, rather than spam folder, and those tracking Facebook anticipate that the social network might adapt that model for brands. Instead of showing up in the News Feed, advertisers could pay to ensure a Samsung or Microsoft chat head appears when you’re walking by the Apple Store.

“[Facebook’s messaging platform] is not just for connecting people," said Howe. "It's for connecting brands, too."

Whether users would accept advertising via messages -- private, personal and traditionally off-limits to brands -- remains to be seen (Home, as a whole, could itself be a total flop). Facebook said in a recent earnings call that adding ads to its mobile News Feed yielded only a small decrease in engagement. But can the company go so far -- if it so chooses -- as to add marketing into individual messages without alienating its users?

“There’s a certain creepy factor to that, but users are getting much more comfortable trading privacy for convenience,” said Silva. “If the targeting works the way it should, and it’s hyper-contextual, targeted and users like it, engagement [with ads] will go up.”

Facebook’s emphasis on messaging follows a wave of interest in mobile applications, such as WeChat and WhatsApp, that offer an alternative to text messaging. WhatsApp, for example, boasts hundreds of millions of users, processed 18 billion messages a day in January, has been valued at $1 billion and fended off an acquisitions attempt by Google, according to a Digital Trends report. Like Facebook's Snapchat clone before it, chat heads on Home may mark just another attempt by Facebook to copy its way to success and avoid losing users' time to competing social apps. While a Facebook-sponsored study by IDC found that smartphone users spent a quarter of their phone time on Facebook, Mobidia, a company tracking data usage, reported that Facebook accounted for just 9 percent of the time U.S. Facebook users spend on their phones. In Spain, Mexico and Argentina, WhatsApp actually occupied more time than Facebook, Mobidia found.

Home could help Facebook convince people to make the social network their mobile home.

"For Facebook, it's about putting Facebook at center of your experience," said Forrester's Charles Golvin."If messaging is going through Facebook ... it's providing more loyalty and retention in the Facebook experience."

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