Facebook(s fb) is a closely watched test case of the speed at which the desktop web era can shift into the mobile era. On Wednesday, it reminded us that mobile is not an option; it’s an inevitability.
Facebook grew to a billion users with a strategy that relied mainly on the desktop web experience for many years. It went public before it even had a decently functioning iOS app. And for a long time it relied on HTML5, which didn’t turn into the winning mobile strategy the company had hoped.
But with investors nipping at its heels, Facebook announced fourth-quarter earnings on Wednesday that finally produced solid numbers when it comes to mobile — a quarter of ad revenue, and, for the first time, proof that daily active users (DAUs) on mobile outnumber those on desktops.
Mobile is crucial to Facebook’s success on almost all levels, but none of it matters unless Facebook is able to capitalize on mobile advertising. As revenue related to gaming and gifts looks uncertain, ads take on a greater importance. Ads made up 84 percent of the company’s revenue this quarter. And if more people check Facebook on their phones than their desktop computers, mobile ads have to play an important part in its strategy. Facebook grew its mobile revenue from 14 percent of all ad revenue in Q3 2012 to 23 percent in Q4 2012, which is a good start; but if those numbers slow, the company could be in trouble.
The huge growth in mobile success in 2012 came not from innovative, brand-new strategies on smartphone platforms, but rather Facebook’s decision to update existing products and improve the user experience. In the Q4 2012 earnings call and at TechCrunch Disrupt in September, Zuckerberg said a faster app alone did wonders from the company’s traffic:
“Often, doing a good job is focusing on basic issues like performance and stability,” he said Wednesday.
But during 2013, Facebook and everyone else will need to think about what exactly makes an app shine on mobile, and then go build it themselves. Eventually, just being faster or bigger might not be enough to maintain growth.
Facebook needs to build the Instagrams, Snapchats, or Vines of tomorrow that actually engage mobile users in a new way. And clearly, Zuckerberg recognizes this:
“Now we’re there. We moved fast and ship new versions of our apps on regular monthly schedules,” he said. “Now the next thing we’re going to do is build really good mobile-first expierences.”
But when he says mobile-first, does he mean an actual mobile device? Nope, don’t hold your breath. There’s no Facebook phone on the horizon, Zuckerberg said.
“The big theme that we’re going to push on is mobile. People keep asking if we’re going to build a phone. And we’re not going to build a phone. Because it doesn’t make sense for us,” he said. “We have a billion people using our product and we have to make Facebook really good across all the devices they’re using.”
Instead, Facebook needs to be the company that solves the mobile ad dilemma, or at least, among the fast followers. The torch has been passed to a new generation of computing at Facebook, and it doesn’t involve the traditional PC.