34 Comments

Summary:

The Apple-Google breakup poses a promising opportunity for other existing and emerging technology powerhouses. But which one of them will be Apple’s new most-favored nation? Signs and logic point to Facebook.

Before a dramatic split last August that saw Google CEO Eric Schmidt booted from the Apple board, Apple and Google had been the best of friends. Now that the two titans are broken up, it’s looking increasingly likely that Apple will buddy up with Facebook.

Apple and Google once shared a common enemy — Microsoft — and had different enough products and goals to coexist symbiotically. But with Google creating and selling Android devices as a direct competitor to the iPhone, swooping in to buy companies like AdMob under Apple’s nose and bringing the FCC in over anti-competitive maneuverings in iPhone app rejections, Apple CEO Steve Jobs has rallied his troops by calling bullsh*t on Google.

See our infographic on the chronology of the Google-Apple breakup

The situation poses a promising opportunity for other existing and emerging technology powerhouses. Who will be Apple’s new most-favored nation? It probably won’t be Amazon, given that little issue of the iPad and the iTunes Store. It could potentially be Microsoft, which is ironically looking for friends as it faces up Google in search and productivity products. But it’s clear that Apple holds grudges. How about Yahoo or AOL for their reach? They may have more baggage than assets. At this point signs and logic are pointing to Apple’s new best friend being Facebook.

TechCrunch reported earlier this week based on uncited sources that Apple will soon add Facebook Connect integration to iTunes. I’ve heard the same thing, and further that Facebook could become the social layer on top of the Apple experience. It would be similar to but broader than the way Google Maps is integrated into location information across iPhone applications — with deep implications for personalization and easy authentication across the user experience and for app developers. Instead of that crappy experience of leaving every app to go to the web to log in to Facebook Connect, you could integrate your Apple and Facebook accounts once, directly.

Apple, which has completely missed out on the social web, would get a huge leg up with the web’s premium social service. And the partnership could be just as helpful for Facebook (which, of course, has positioned itself squarely against Google as well), in terms of enabling commerce.

Facebook Connect on the iPhone today

That’s because the real prize here, for both Facebook and Apple, is authenticated payments for digital and real-world goods. Probably the single most important alliance to be brokered today is the connection between users’ online identity and their bank accounts. Spending money online and encouraging your friends to follow your lead is a huge market (here’s the obligatory call-back to the problematic but perhaps just before-its-time Facebook Beacon product). The Facebook social graph plus iTunes’ 125 million credit card accounts would be formidable. With their powers combined it would be much harder for PayPal, Google and Amazon to compete.

 Facebook and Apple have long been chummy, with some of the earliest corporate participation on the site being the “Apple Students” group, which dated back to at least 2006 and foreshadowed the current Fan Page product. And funnily enough, just like Apple has lagged on social, Facebook has lagged on music.

Facebook already has the beginnings of an alliance with PayPal to allow international advertisers to pay without credit cards (PayPal says it has more than 81 million active accounts). But as TechCrunch points out, Apple’s Lala acquisition could help be the connector between the two companies, given the music startup’s previous experience working with Facebook on allowing users to gift songs.

Still, there’s one indicator that Facebook and Apple are definitely not on the same page yet. At launch, there was no Facebook iPad application — an obvious fit for the device — and someone on Apple’s crack app review team let through a paid Facebook rip-off app that fooled and confused customers last weekend until Facebook had it shut down for trademark infringement.

Photo of Steve Jobs by Curious Lee. Mark Zuckerberg by Deney Tereio via Flickr, Under CC License.

Related content from GigaOM Pro (sub req’d):

With the iPad, Apple Takes Google to the Mat

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  1. Without Flash, you can’t play Farmville. Which means all those micro payments that Apple may lust after aren’t going to work out so well when all those Flash games get turned into little Lego blocks.

  2. OH God… Farmville again.. I Play it, it was just an OK game. MY facebook crashes due to all the game loading i.e. Farmville, Cafeworld etc. It’s not too much fun that I have to wait or after I click everything then “page needs to reload” message. I think Facebook needs to ditch Flash for something better. In fact, I found other social games for my iPod is more fun and I actually pay for something compare to Facebook games that I have never paid for anything.

  3. It’s more consistent with Apple/Jobs history to invent a competing social network that spins out from the iTunes base.

    The social network crowd from Twitter to Facebook have no end of platform criticisms that could be addressed easily by a firm that understands user-friendly.

    Not as if they’d have to start from scratch. How many iTunes subscriptions are there? Adding a social network gateway creates another symbiosis.

  4. So is Zuckerberg going to jump on Apple’s platform and then there will be this big fight. When they do something Apple doesn’t like.

  5. Why Apple believes that it should control every aspect of the computing experience is beyond me. Partnering with Facebook is a good sign, but treating developers as partners and allowing them to develop stuff even at the expense of iTunes is important. Hell, buy them if they become successful. Don’t have enough cash?

    The worst aspect of Apple, Microsoft, Google, etc. is that they want the whole damn pie. Lighten up people! You’ll make money.

  6. Sanjay Maharaj Wednesday, April 7, 2010

    This will be interesting to watch as Apple and Facebook size up each other, the fit makes sense but in a limited way

  7. Apple may have enough cash to acquire Facebook outright. It would be unlike Ape to do so, but it would also open tons of possibilities.

  8. First, I must complain. Based on the headline I thought you had something far more concrete.

    That said, really like this article. I have commented here on the (old school) fallacy of closed systems vs open systems. That’s the past. Now it’s ecosystems. And Apple and Facebook have each built thriving ecosystems. If they link them up, that’s a powerhouse!

    I’ve said it many times on my site: the smartphone is the computer! Right now, Apple makes the best smartphones, Facebook is optimized for smartphones, Paypal has just released a darn good iPhone app and Apple has taught consumers to keep a lot of their stuff in the cloud.

    Facebook can’t go public soon enough for me.

  9. If Apple thinks that consumers will trust Facebook — after its persistent invasions of privacy and spamming of users’ e-mail address books — to handle their online payments, it’s sorely mistaken.

  10. Murdoch and Collapsing Business Models « apm35 Wednesday, April 7, 2010

    [...] Why Facebook & Apple Will Team Up Against Google — GigaOm Damon Darlin says: New best friends? Facebook and Apple need each other to fight Google. [...]

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