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Facebook acquired mobile fitness and tracking app Moves for an undisclosed sum Thursday, promising to “work on building and improving their products.” With the acquisition, one might assume that, Facebook is placing a vested interest in the quantified self.
But I would argue that the big asset that Moves brings to Facebook is a mature passive location product that could help the social media platform further refine its location data — and, in turn, its ad network.
The key is Facebook’s nascent mobile ad network, which was a big discussion topic in Facebook’s Q1 2014 earnings call on Wednesday. Although COO Sheryl Sandberg attempted to tamp down expectations by saying that the product was in “really early days,” it was clear that the team is excited about the ad network’s performance: Mobile ad revenue now represents 59 percent of the company’s overall ad revenue, and includes robust ads that were rolled out in January of this year.
By adding Moves’ passive location technology — which, as CartoDB noted in a blog post Thursday, can get very detailed — to its mobile experience, Facebook can boost the value of opt-in geolocation products like its recently announced Nearby Friends feature. But the real value is in the highly detailed user location data. If Facebook can flip Moves’ technology into an lightweight passive location feature embedded within its core app (or a separate app like Messenger) that offers users sufficient utility to opt-in, then it will in turn have high-quality data to turn over to advertisers. The result would be a location-based ad unit, which would likely be a major revenue-generator for the company.
Facebook could certainly explore the quantified self in its own way — Moves’ technology certainly makes that possible. But with a mobile ad network on the horizon, Facebook has just bought itself technology that could produce big returns in a short time.