Facebook's New Push Into Apps Is Genius Because It Exploits The Secrecy Of Apple And Google
Everything he announced has one thing in common: It takes full advantage of the secrecy surrounding the way Apple's App Store and the Google Play store on Android rank and feature apps, which are the goldmine for app developers.
Zuckerberg is literally going to start monetizing their lack of transparency.
Some people got really excited about the new app-to-app "deep linking" ability that Facebook is giving to app makers. It's a technical change that allows a person using one app to tap a link and go directly into another app without one of those awkward stopovers on the mobile web.
But that's not the most interesting bit.
Personally, I thought the new anonymous Facebook login - which will let people access apps without revealing their identity to anyone - was the most exciting development. People will be able to try out new apps without their Facebook accounts broadcasting to the world their outre tastes in mobile content. App developers will like the fact that it opens up a whole new audience of nervous-nelly downloaders.
But that's not the crucial bit, either.
And then there was the offer of $30,000 of free services to new developers, and the Facebook Audience Network that offers advertising on apps outside Facebook but using Facebook's targeting data.
On their own, they're all neat, but of real interest only to developers and coders.
Normal people can roll over and go back to sleep.
Why Zuck mentioned Apple and Google
... Except for the part where Zuck referenced Apple and Google: "The majority of our business is on mobile," he told 2,000 developers at F8. "But it can be annoying to build on mobile because it is so siloed. Apple, Google and Amazon all have their own platforms. ... No one has been incentivized to help people build apps that work on all these platforms."
That, right there, is the key to Facebook's new strategy on mobile. Nobody knows exactly how or why apps rise and fall inside Apple's App Store and Google Play.
And Facebook is going to fix it.
App store rankings appear to be a combination of total downloads, review ratings, and monetization. But no one knows for sure. On top of that, apps are "featured" in the stores via editorial choices from the mysterious staffers who run the app store. It's unknown how that works, or who really does it. (They might be picking apps by meeting at a spooky abandoned castle on a dark and stormy night, carrying candles and wearing monks' cowls, for all we know about how to get an app featured in Apple's App Store.)
"No one knows how it works," Marcos Sanchez, a VP of global corporate communications at the mobile analytics company App Annie, told me after F8.
"No one knows how it works"
Yet those secret choices can make or break an app.
Everything Facebook announced last week was designed to take advantage of that.
All new app makers are faced with a Catch-22: people will download apps if they're near the top of the app store. But you can't get to the top of the app store until after people have downloaded your apps. You could have the best new app in the world ... but no one will know unless you get lucky.
The business becomes even more inefficient because victory goes to the company with the biggest marketing budget. King has even been advertising Candy Crush Saga on TV in the last few months.
Facebook's app development platform, Parse, makes it easy for software companies to make and run new apps. Facebook makes it easy and relatively cheap to advertise new apps both on Facebook and in third-party mobile media. And Facebook itself, with its 1.2 billion members, is a giant platform for exposing apps to new users. It drove more than 145 million app downloads in 2013 alone, and made nearly $900 million that year from in-app payments.
The best part: It's completely agnostic in terms of Apple's iOS or Google's Android mobile device operating systems. Both Apple and Google will benefit from the extra downloads that Facebook drives to them, making it unlikely that either company will sabotage Facebook's new role as the premier place to build and discover new apps.
It's all rather cozy, for all three companies.
But note that the only reason Facebook's "app discovery" strategy exists as a business is because Apple and Google made it so hard to figure out how to get exposure for apps in the first place.