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Facebook Home: Is It Cozy Or A Prison?

Facebook's new user-interface software puts the social networking site front and center on smartphones. But analysts aren't sure if users will find Facebook Home cozy — or more like a prison.

The new software, based on the Google (GOOG) Android operating system, is designed to make it easier for Facebook (FB) users to interact with each other, and puts friends' content on the phone's lockscreen. Once installed, users will have to navigate past Facebook to get to other applications.

"We're not building a phone and we're not building an operating system," said CEO Mark Zuckerberg at Facebook's Menlo Park, Calif., headquarters. "The great thing about Android is that it's so open," he said, adding later that Apple (AAPL) iOS is not. Android is the dominant operating system on smartphones, overtaking Apple more than a year ago.

Facebook Home may threaten Google by diverting mobile users away from Maps and other services — and its mobile ads.

Analyst Trip Chowdhry of Global Equities Research says Facebook's Home is similar to Barnes & Noble's (BKS) Nook and Amazon's (AMZN) Kindle, both of which run a modified Android.

But Google wasn't wise to let Facebook modify Android, he said, speculating that Facebook Home is one reason for the Android unit shakeup last month.

"If you know your prime competitor is taking a free ride using your technology, and you don't do anything to stop it, you've messed up," he said.

A Google spokesman told IBD, "The Android platform has spurred the development of hundreds of different types of devices. This latest device demonstrates the openness and flexibility that has made Android so popular.

Home applications include Cover Feed, which replaces the typical home screen on smartphones, for receiving and posting updates. Chat Heads is an enhanced messaging system. Notifications highlights certain messages, calls or appointments.

Facebook in Q4 had 680 million mobile users, with 157 million exclusively mobile.

Analyst Jack Gold of J. Gold Associates in a report questioned whether most Facebook mobile users will find Home appealing, given its ever-present status.

"What Facebook sees as Home others might see as Jail — too much control and too many boundaries," he wrote. It might only appeal to diehard Facebook users, he said.

The software will be available for download on select Android handsets April 12. A $100 HTC phone with Home preloaded will also be out April 12, via AT&T (T).

Facebook rose 3% to 27.07 in the stock market. Google lost 1% to 797.07, closing below its 50-day line for the first time this year.

It's unclear when or how much Home will boost Facebook's mo bile ad revenue. "There are no ads on this yet. We wanted to focus on quality," said Zuckerberg.

When pressed over whether there will someday be ads on Home, Zuckerberg said, "Yep.

U.S. mobile advertising revenue will jump 77% this year to $7.3 billion, projects eMarketer. Google will get a 55% market share and Facebook 13%, the research firm said. That's up from 53% and 9%, respectively, in 2012. Mobile ads accounted for 23% of Facebook's ad revenue in Q4 vs. 14% in Q3.