Recent rumours have sparked speculation that Facebook is looking to build and expand its empire into new markets, following the acquisition of Instagram in April this year.
PC World recently reported that technology observers are speculating the social network is looking to snap up the Opera Web browser.
Ovum principal analyst Tony Cripps said if Facebook is to buy Opera, it could leverage Opera’s strong base in the global handsets market, particularly in developing markets where smartphones haven’t yet become the norm, to extend its global presence.
“Owning a browser is a powerful way to gather user data and to control advertising in that environment without having to own the device operating system. Moreover, where a company has browsers for PCs and smart devices, any data and advertising influence it has in one place can be leveraged via the Cloud on other devices, whether mobile or fixed,” Cripps said.
However, he said Facebook risks alienating carriers as it could limit their ability to offer value-added services to their subscriber bases.
Facebook would also find itself against some stiff competition, with the browser market becoming more and more populated – Cripps said the market is increasingly being dominated by device platform players.
“A move by Facebook in this direction would undoubtedly add a new layer of intrigue to a piece of technology that has often been thought of as a commodity,” he said.
Cripps believes in order for the acquisition to be successful, if it were to go ahead, Facebook would need to broaden the appeal of Opera for not only the mobile platform, but also the desktop, where it is weaker.
“A browser-led strategy does, however, run the risk of being cut out of major smart device software platforms, [such as] iOS, Android [and the] Windows Phone, where their native browsers are clearly favoured and built in,” he said.
“This would likely slow the growth of any Facebook browser on these devices unless the company is able to prove to consumers that their experience of using Facebook, and perhaps the internet as a whole, is improved by using a Facebook browser. If successful, this would then provide the engine room for a stronger ecosystem play.”
While Cripps said Web browser companies would be surprised if Facebook didn’t try to extend its influence – he said it is an “aggressively expansionist company” – he believes the browser platform would provide an economical tool for developing and controlling ecosystems, “...if perhaps less strategically potent overall than owning Oss”.
As to the other rumours currently circulating about Facebook’s plans to develop a smartphone, which could come next year, Cripps said the social media network would be well aware of Google and Apple’s stronghold of the smartphone market. However, it has now reached a point where developing a smartphone is becoming a necessity for the company, he said, if it wants to create a more device-oriented service.
“That said, this is a very tough market to crack requiring enormous resources to build a network of OEMs and operators through which to achieve critical mass. A single Facebook phone that sold millions of units may be a considerable achievement in itself, but will make very little dent in the current Android/Apple duopoly,” Cripps said.
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