Today, Mark Zuckerberg and the Facebook team announced their plans to gradually release Facebook Places tonight in the United States for the iPhone and touch.Facebook with a full release expected in the following days. Although Facebook Places is still in its infantile stages, it has all the makings to further Facebook’s growth in the mobile market. Taking into account the partners that Facebook introduced at the event along with their existing assets, Facebook Places threatens to not only take over the mobile space, but change the way we do business.
What is Facebook Places
Before moving any further, we should address what Facebook Places exactly is. Facebook Places is a mobile application that will allow users to do 3 things: (1) find out where their friends are/let them know where you are, (2) check-in at locations, and (3) discover new places. With development for Facebook Places starting in December 2009, Mark Zuckerberg stated that the toughest part in building the new application was “figuring out what is a good set of features” to have. As mentioned, the 3 focuses on the Facebook Places application that have been initially built will focus on enhancing the community experience and sharing it with others. With features such as geo-tagging of images as well as linking businesses to locations, Facebook continues to push envelope as far as innovation and reach.
Facebook Places Initial Partners: FourSquare, Gowalla, and Yelp
One of the common reactions that anyone learning about Facebook Places for the first time will tell you is that it reminds them of a combination of FourSquare and Yelp. In what may or may not be a shock, Facebook introduced a few of the partners that they would be working with from the start: FourSquare, Gowalla, and Yelp. While the details of these relationships are still unclear, what’s important to note is what the implications are of these potential partners.
By bringing in companies like FourSquare, Gowalla, and Yelp, Facebook is positioning themselves to be at the center of the mobile space, while FourSquare, Gowalla, and Yelp have the chance to partner with one of the largest databases in the world (500 million users worldwide.)
3 Ways Facebook Places Will Own The Market
1. The mobile transition
As mentioned, Facebook has over 500 million registered users. Off this same note, of those 500 million, nearly 150 million users access their social accounts from the Facebook mobile application. Unlike other mobile applications where early adopters played a key role in the success of mobile applications, Facebook users are no stranger to mobile applications and will see Facebook Places as more of an extension of something they are familiar with rather than something brand new.
2. The Potential
When asked about the business model behind Facebook Places, Mark Zuckerberg replied that at the moment they were focusing on the 3 core goals [(1) find out where their friends are (2) check-in and (3) discover new places] that they had initially built Facebook Places for, but that because the application has so many possibilities, there will be opportunities for them to profit off of it.
Although he didn’t say it, we can only guess that a few of the revenue generation mechanisms that Facebook Places will allow will include geolocation based deals to users, reward system for checking in, and partnerships with business to create official Facebook Places partners, similar to the relationship that Startbucks has with FourSquare. Taking into account also the brand equity that Facebook has, they should have little trouble finding businesses interested in working with them.
The biggest reason why Facebook Places has the opportunity to take over the mobile space is in the data that they posses. Although major mobile applications like FourSquare and Gowalla have their own API available for anyone to use, Facebook Places will be backed by the 500 million registered users which will be appealing to almost every business. While Facebook Places does have permission and privacy settings in place, which will undoubtedly deter some users from using it, if Facebook Places were to get just an eigth of their 500 millions users to use it, they would still have 125 times more users than FourSquare.