By Marcus Leach
Facebook have this week unveiled software that puts feeds from the social network on the home screen of Android phones.
The software will act like a wrapper for the Android operating system and become the main way to use a phone.
Notifications, images and messages will appear on the main screen of the phone instead of being accessible via a downloadable app.
Facebook founder Mark Zuckerberg said the change would put people, not apps, at the heart of the mobile experience.
"Facebook's move is a classic case of 'out-googling' Google," Victor Basta, managing director of Magister Advisors, said. "By going 'over the top' of Google's prized Android operating system, Facebook is doing to Google exactly what Google did to the Internet, sitting on top of a chaotic system, making it simple and uniform through a proprietary layer, and underpinning this with deep search functionality. In Facebook's case it happens to be sitting on top of Google's prized Android OS supported by the depth of Graph Search.
"The clear strategic threat is that it could dramatically reduce the value of Google's investment in Android, and Google has zero say in this, since unlike Apple, they do not control what happens within the Android eco-system.
"The bigger picture is that Google, Facebook and Apple are now all effectively competing for the same sources of value, and therefore the market valuations of all three companies increasingly represent the 'pie' from which each company is taking a slice. In future, what drives Facebook's valuation up is more likely to drive Google and/or Apple down. This is a three—way fight in which everyone else marginalised.
"Facebook are clearly hell-bent on breaking Google's hegemony in search through a combination of Graph Search and deeper mobile device integration. What's interesting and significant about the steps that Facebook are taking with search is that they stem from a behavioural understanding of the user base. Graph Search is powered by the behaviour and choices of "people like us" wherever we are.”
“They’ve made a big play today of Chat Head, but what they’re actually talking about is ‘Chat Nav’, which has enormous commercial potential. As communities share views and opinions in new ways it transforms the nature of online commerce. People and interest-based search is emerging as the driver for Facebook's next $100bn of value."