Is Facebook Quietly Making the Right Moves?
Karen is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
With all the attention focused on Facebook’s (NASDAQ: FB) blunders, it’s easy to overlook what they're doing right. Facebook employees and their board of directors are working feverishly to create new revenue sources without sacrificing their position as the social media giant.
The New York Times has confirmed that Facebook has quietly been hiring former Apple (NASDAQ: AAPL) engineers, including at least one who helped develop the iPad. It’s the possible development of a Facebook tablet, rather than a smartphone or apps, that’s the most intriguing.
Is there a Facebook tablet in the works? Is that why they’ve hired Apple’s former iPad engineers? From a practical standpoint, developing a tablet would put Facebook on the tech fast track and might be a better choice for the company rather than a smartphone. Tablets are cheap to produce and Facebook can reserve the rights to decide what software could be installed. Would Facebook create their own operating system or perhaps partner with Apple and use their iOS? Or would Facebook join forces with Google (NASDAQ: GOOG), thereby taking advantage of Android’s OS, Chrome and Google’s web presence?
Several days ago Facebook opened their own App Center and rolled out approximately 600 free downloadable apps for members. Draw Something, Pinterest, and Nike+ GPS are included along with newly developed apps such as Ghosts of Mistwood, Ghost Recon Commander and Jetpack Joystick. The company also offers paid-for apps and, for the first time, is allowing software developers to sell their apps directly to the public through the Facebook site. Facebook’s 600 apps pale in comparison to Apple’s 500,000+ and Google’s 400,000+ apps, which means the social media giant has a lot of work to do if they hope to compete with their rivals.
Facebook appears to be moving forward with their smartphone, a/k/a Project Buffy. At least six engineers who worked on the iPhone have recently joined Facebook’s ranks, but Facebook must decide how deeply the company wants to dive into the smartphone business. Do they want to start from scratch by taking on the significant expense of creating their own hardware and developing an OS system that can complete with market heavyweights Apple, Google and Samsung? Would it be faster and more cost efficient for Facebook to buy an existing smartphone company, such as the struggling RIM (NASDAQ: BBRY) or HTC, and just add their own operating system?
Hopefully Facebook’s board of directors and employees will successfully answer these questions and see their company morph into a revenue generating business before time and shareholder patience runs out.
kprogers has no positions in the stocks mentioned above. The Motley Fool owns shares of Apple, Facebook, and Google. Motley Fool newsletter services recommend Apple and Google. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.If you have questions about this post or the Fool’s blog network, click here for information.