New fortnightly markets column
Facebook monetises mobile – again
Facebook last week unveiled its latest incarnation, a not-quite app, not-quite OS called Facebook Home.
We will see in time how significant this becomes in time, although I would hope at the very least it heralds a change of emphasis in the mobile world that brings welcome relief from counting pixels the eye cannot even see and cores we probably do not need.
For the financial markets the questions inevitably revolved around what it means for advertising revenue. Sadly details were hard to find so it was difficult to make a judgement. Perhaps that is why the stock market did little more than yawn.
Nevertheless, it is clear Facebook has recovered from its mobile misstep which Mark Zuckerberg thinks lost the firm two years of development. With every product launch they are homing in on a killer business model and you only have to look at Google to see what that can do for a company.
Smartphone saturation
Staying in the mobile world, Samsung announced their quarterly results last Friday and thoroughly beat analyst expectations in the process. The bottom line? They shipped around 65 million smartphones (for reference Apple sold 48m iPhones in its last quarter). Most of them were either the Galaxy SIII or Note 2: as a result they may as well have been minting money. Still, despite it all the shares barely reacted and ended the day of the results almost unchanged.
It highlights a difficult period when it comes to handsets. It has been a stellar few years for both Apple and Samsung, but what have been essentially two huge product cycles look to be getting long in the tooth.
The iPhone 5 and the Galaxy SIV were both disappointments on the back of huge anticipation. Moreover, smartphones are increasingly saturated at that super-profitable high end with peak growth years undoubtedly behind us. Next to Facebook Home the user experience is starting to look tired in both iOS and Android, and there is only so thin and fast these devices can be made. In 2012 Samsung spent $4bn in advertising alone, double previous years, which in itself is probably a sign.
Cloud comes of age as Salesforce.com rakes in over $3bn
Elsewhere, salesforce.com is not a name that has much prominence in the consumer world but they are making waves in the staid and be-suited arena of big company IT. A start-up only 8 years ago, they saw revenues surpass $3 billion for the first time in 2012 (that’s £2 million, give or take). Their senior management came through town last week and outlined the strategy that would take them through $10 billion of revenues and into the big league of enterprise IT companies like Oracle. Salesforce also recently moved into London’s Heron Tower, the home of Tech City News‘ Elevator Pitch series.
The essence of their message is that we are in the age of cloud, social and mobile and old software was not designed to cope, never mind take advantage. They are expanding their products from customer relationship management software to marketing, social analytics and, most strategically, development platforms. Heroku and force.com are two flavours of development platform designed in the cloud for the cloud; or cloud-based operating systems, if you like. It is a market that pulls in $17 billion every year and salesforce.com have their eyes on a big slice of that pie.