Facebook Propositions Mobile Operators

The Cheat Sheet

Facebook is trying to make money off mobile by offering operators a piece of a very lucrative pie. During the Mobile World Conference, Facebook encouraged mobile operators to team up with the social network on payments, promising them the chance to get in on revenue that they have lost to Google and Apple in the recent years.

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Internet companies have beat out mobile operators by appealing directly to consumers, by hogging network capacity, and by creating their own mobile products. Facebook is suggesting that mobile operators help it make money, of which they will take a cut, from the millions of mobile users that purchase games and music on the social network. More than half of Facebook’s 845 million active users access the site via their mobile devices.

Facebook has made its $3.7 billion in revenue from advertising, but the company is still trying to figure out how to make money off mobile users. It is still unclear whether its proposed partnership will prove worthwhile for mobile operators. Facebook chat, the messenger service the social network offers all users free of charge, detracts from SMS text services offered by mobile carriers, making Facebook a more likely competitor than ally.

Still, Apple and Google now collect a 30 percent toll on all apps sold in their app stores, and Facebook could help put that money in mobile operators’ pockets instead. Eight major operators around the world have already gotten on board, including AT&T .  Facebook’s plan could also help make money from users of more basic phones in emerging economies where mobile users don’t have access to app stores or own credit cards to make online purchases. Facebook’s push for better web standards would also enable more aps to be delivered through a simple Internet browser instead of through Apple and Google’s app stores.

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To contact the reporter on this story: Diallah Haidar at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com

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