There is a scene in David Fincher’s excellent film, The Social Network, where the Facebook team celebrate its 1 millionth user. That was in late 2004. Last week at its f8 developer conference in San Francisco, Facebook announced it had reached 800 million ‘active’ users, which could see the firm chalk up 1 billon before year-end.

The 1 billion milestone underlines Facebook’s phenomenal success (if that was ever in doubt) but it distracts from the fact that the firm currently finds itself at something of a crossroads.

Dig a little deeper into the user numbers and it becomes apparent that Facebook’s growth (and future) is not necessarily assured. In many mature markets, user growth is flat or even in decline, while it faces fierce competition from the likes of Twitter and Google +.

Arguably, Facebook’s model has run its course for users that have had accounts for five years or more. Unlike Twitter, which could be said to be about forging new contacts, Facebook is about maintaining existing ones – and there is evidence that users drift away from the service once their ‘friends’ count begins to slow. As CEO Mark Zuckerberg noted at f8 last week, with the connections now in place, this means that the “next five years will be about engagement” – not growth.

Zuckerberg’s solution, unveiled at f8, marks arguably Facebook’s biggest shift in strategy since its inception. Rather than just a stream of status updates, the profile page will now co-ordinate all content uploaded to Facebook into what it calls a ‘Timeline’ – an online scrapbook of everything you’ve ever done and everywhere you’ve ever been. This will no doubt spook many users already concerned about Facebook’s attitude to user privacy, but it could be just the refresh Facebook needs to bring disaffected users back into the fold. (See the video below)

The second plank in Facebook’s new strategy concerns closer integration with media content providers, providing apps that link users of services such as Spotify (music), Netflex (video) and online newspapers such as The Guardian and The Independent. While some of these services will undoubtedly prove successful, Facebook must be careful not to abandon what it does best in a bid to become a content provider – a booby trap that has ensnared many great Internet names: Yahoo, AOL and MySpace among them.

But what about Facebook’s mobile strategy? While much of the telecoms press (including us) ran with the news that some 350 million ‘active’ users were now accessing Facebook via mobile devices (over 40 percent of the total), that was pretty much the only time mobile was mentioned in San Francisco last week. There was no information about how the new profile redesigns and services will work on mobile devices; no news on the long-awaited Facebook app for the iPad (18 months and still waiting); and no comment either on Facebook’s reportedly imminent move to an HTML5 apps platform.

It’s this last one that has the mobile industry in a spin. If Facebook – currently the most downloaded app on any vendor platform – moves to a browser-based approach, it will mark a seminal moment in the (short) history of mobile apps. By using an HTML5-based platform, Facebook would be free to develop and monetise its own range of apps without being tied to the T&C’s and revenue share demands currently required to run on iOS or Android. And regardless of what you may have heard, Facebook doesn’t need to acquire its own hardware (the mythical ‘Facebook phone’) or someone else’s failed mobile OS (HP’s webOS) to make this happen: it just needs a phone with HTML5-enabled web browser.

For as long as Facebook remains tight-lipped on its plans, the rumour mill will continue to grind. And with the lack of any firm mobile-related news coming out of last week’s event, it’s not impossible that Facebook is gearing up to make a big announcement soon. Watch this space.


Matt Ablott

The editorial views expressed in this article are solely those of the author(s) and will not necessarily reflect the views of the GSMA, its Members or Associate Member