Business Insider predicted back in 2010 that mobile data traffic would grow 26x through 2015. This doesn’t just spell opportunity, but rather is a danger for companies that don’t adapt. As more people gravitate to smartphones and tablets, we are increasingly forgoing the desktop to the access the Web. Between 2008 and 2011, the percentage of U.S. adults who accessed the Internet from PCs every day grew to 62% from 54%. In the same period, the percentage of daily mobile Internet users rocketed to 26% from 4%, according to Forrester Research.
Even after its IPO crash, Facebook Inc (NASDAQ:FB) is still a Wall Street gem. Despite the company’s perils, mobility is key, since the company is earning only 15% of revenues from mobile devices.
Facebook Inc (NASDAQ:FB) advertisers can now choose which mobile devices their ads appear on, and is making a big bet on the app market. Facebook has been allowing all developers to buy mobile app install ads to appear on mobile feeds. The more Facebook optimizes, the more it will make in the mobile sphere.
In my opinion, the hard numbers are not what’s important, but rather the direction. Facebook Inc (NASDAQ:FB) must overcome the stigma that it cannot capitalize on the mobile market. Once it shows it can, and with at least steady growth in the mobile sphere, it will have overcome major downward pressure on the stock price.
The Mobile Newspaper
The social network has been quietly working on a service, internally called Reader, that displays content from Facebook users and publishers in a new visual format tailored for mobile devices, people with knowledge of the matter said, aiming to become a newspaper for mobile devices. It’s unclear when Facebook Inc (NASDAQ:FB) will be ready to unveil the product, if it ever is, the Reader project is a sign the company is trying to get users to spend more time with it on mobile devices—and to see more ads.
Mobile Games
It was recently announced that Facebook Inc (NASDAQ:FB) is testing what could finally bring it direct revenue from the mobile gaming ecosystem beyond advertising.
The company is working with a handful of small mobile game developers by offering distribution through mobile ads in exchange for a cut of revenue. Facebook confirmed it’s working on tests for new mobile game distribution, but hasn’t shared more details publicly.
Facebook Graph Search
Perhaps the biggest news for Facebook is the announced release of Graph Search, a search engine trying to make it easier to find that lost photo or restaurant recommendation and unearth other information buried within your social network. Many experts believe developing a sophisticated search feature is vital to Facebook’s long-term success, both to deepen users’ engagement and to make it more appealing to advertiser. Unlike Google Inc (NASDAQ:GOOG)’s familiar search engine, which typically takes the keywords entered into a search box and matches them to the most relevant Web pages that contain them, Facebook’s search looks primarily at structured data like analyzing the virtual check boxes that people fill out on the site, like movie pages they have liked, restaurants they have checked into, the city they live in and their relationship status.
The one thing Google Inc (NASDAQ:GOOG) has going for them, and the biggest antagonist for Facebook search, is that they control nearly 25% of all North American Internet traffic, according to a recent study conducted by analytics firm DeepField. In 2010, Google Inc (NASDAQ:GOOG) represented just 6% of Internet traffic. Well over half of all devices connected to the internet are sending traffic to Google Inc (NASDAQ:GOOG)’s servers on any one day, and when added up, that’s larger than that of Facebook, Twitter and Netflix combined. Google Inc (NASDAQ:GOOG) is certainly still the king of search and shows no signs of letting up. Google Inc (NASDAQ:GOOG) search makes up nearly 66% of the market share for search engines, with Microsoft’s ‘Bing’ and Yahoo! Search falling behind with 16% and 11% market share, respectively.
Foolish Conclusion
Facebook Inc (NASDAQ:FB) is making exhaustive efforts to take advantage of our mobile culture and will continue to do so for many years. The increase in mobile technology and availability of mobile products will only help the social network, and if they want to get back to their IPO price of $42 dollars, they must continue to focus on the fasting segment of technology in the world.
The article Mobility Matters to these Tech Titans originally appeared on Fool.com and is written by Chris Johnson.
Chris Johnson has no position in any stocks mentioned. The Motley Fool recommends Facebook and Google. The Motley Fool owns shares of Facebook and Google. Chris is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
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