Facebook Home is a tactical move that points to a broader structural question: regardless of the specific appeal of Home as we see it now, does the current swarm of mobile social services resolve in consolidation into one or two dominant players?
If the answer is yes, then Facebook’s existing scale makes it by far the most likely winner. However, I'm not sure that consolidation is inevitable.
There are three relevant precedents to choose from. On one hand, there were once a range of competitors to Facebook on the desktop, and some argued that there would be regional winners. Instead, Facebook crushed almost all the local alternatives, such as Bebo or Orkut, leaving only specialised niche players like LinkedIn (whose main value is as a CV database, not a social network) or dating sites.
Conversely in instant messaging, there were regional winners: everyone in one country used Yahoo Messenger and everyone in another used AOL Messenger – not because of product differences but purely though network effects. This seems a less likely outcome, though.
However, the most worrying precedent for Facebook is AOL – a hugely dominant aggregator that was unbundled and never replaced.
It seems to me that a driving dynamic for consolidation and integration on the desktop is the network barrier: the hassle of creating your social ‘graph’ (in Mark Zuckerberg’s phrase) on a new network. This argues against the current fragmentation, naturally.
Yet on mobile the social graph comes ready-made in your address book and the accompanying PSTN numbering system. Your phone already knows who your friends are – you don’t have to enter them into each new social network. Both Whatsapp and Viber leverage this: they look at your phone book and tell you who’s already using it.
This is a much simpler global identity system than Facebook Connect: phone numbers (and the address book) are themselves a single global social network that any app can use, bypassing Facebook’s biggest protective ‘moat’ and removing a lot of the problems of fragmentation. Such apps ride on mobile and mobile numbers just as Facebook apps ride on Facebook and websites ride on the web. There are lots of social apps on mobile, just as there are lots of apps on Facebook or lots of sites on the web: this is not necessarily a problem.
In other words, the current ‘fragmentation’ of mobile social may only be the same ‘fragmentation’ that happened to the web as people moved on from AOL. People decided they were ready for best of breed services and content sites, rather than getting everything through AOL. The current rapid bubbling-up and equally rapid disappearance of new social apps may not be a transitional phenomenon.
(This is an excerpt from a detailed report produced for Enders Analysis.)