Buffy: The Facebook Saver? From Ads to Apps and Back Again

The hullaballoo surrounding Facebook's IPO, the eye-watering $100bn headlines and the subsequent bickering, has largely passed by the social giants' 901m users.

Last week's launch of the App Center could make a much bigger impression and may prove a canny move in answering criticism of Facebook's slow progress in monetising it's half-a-billion (yup, you read it right) active mobile users.

If the IPO critics are to be believed, the company's valuation and its future is all about advertising revenue, but the App Center launch launch hints at a longer-term strategy. If successful, it could establish Facebook at the heart of the app ecosystem, as well as seeing the coffers swell with mobile ad and targeting revenue.

In November last year, rumours started flying that Facebook was gearing up to launch its own phone, with a potential launch date in 2012. Code-named 'Buffy', tales of production at HTC and the stealthy hiring of hardware engineers abound. The NY Times quotes an un-named Facebook source,

"Mark is worried that if he doesn’t create a mobile phone in the near future that Facebook will simply become an app on other mobile platforms,”

The crucial part here is 'an app on other mobile platforms'. Whilst commentators have been focusing on developing a mobile advertising strategy, Facebook's entry into to the world of the app could be decisive.

Facebook is stepping out of the operating system layer and planning to cement their lead position in the social layer. They already 'own' a massive chunk of social traffic, by inserting themselves into the app value chain - discover a mobile app on Facebook, head to iTunes App Store or Google Play to download (for now) - effectively, they become the gatekeepers.

Add Facebook Timeline apps and the clever integration through the 'Send to Mobile' feature - get apps on the website sent to your phone - and there's a well-rounded offering that also provides marketing opportunities, advertising placement and even more demographic data.

But the really smart piece? Social discovery of apps. App Center may start life as a socially-enabled directory, but it's not likely to stop there. Think about the last time you browsed an app store. Hard work, right? And getting harder. Now consider the experience with social data, it looks very different.

I wonder whether the product managers have taken a leaf out of Netflix's book, in fact comparing Lovefilm with Netflix is comparable to iTunes App Store and Facebook's App Center. Compare the evidence from my app store views (click for full-size):

iTunes App Store

Facebook App Center

Wes Biggs, CTO of Adfonic writes in Forbes,

"Right now, it’s just an App Center that is more of a showcase, pointing people to Android and iOS apps that work with Facebook, and not even charging for the privilege. But by promoting Facebook-enabled apps, Facebook could be signalling a strategy to make itself the social layer in an ecosystem of apps.

Instead of – or perhaps as well as – the full-on, high-profile approach of acquisitions, features and phones, its App Center could quietly be establishing itself in the world of mobile advertising, with Facebook-enabled apps showing Facebook-powered ads, pumping their data back to Facebook and making it an irresistible ad platform.

In a neat sidestep, Facebook could become the heart of an extremely disruptive ad network with huge reach and laser targeting – and all regardless of operating system."

Clearly the marketing folks at Facebook are feeling confident about the launch, they've featured fast-growing potential competition Pinterest as one of the apps!

What do you think? What's your take on Facebook's mobile strategy? Sink or swim?

Photo (cc) Sam Michel.