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The reason Facebook Home exists

Updated May 3rd, 2013 2:20PM EDT
Facebook Home Analysis

Facebook Home has its fair share of critics. But while I personally can’t stand Facebook as a service, I am not one of them. Home takes over the user’s Android smartphone and replaces the home screen with an unending stream of full-screen Facebook photos and status updates posted by friends. The first version of Facebook’s new Android software clearly has some kinks that need to be ironed out, but Facebook has more incentive than it could ever need to get the job done.

A quick glance at the company’s first-quarter earnings report reveals that mobile revenue now accounts for nearly one-third of Facebook’s total advertising revenue. That figure is up from 23% in the previous quarter, and it will continue to grow. Mobile is the future of computing, and it is the future of Facebook as well.

Analysts at JPMorgan Chase were expecting Facebook’s mobile revenue to come in at an impressive $320 million in Q1 2013, and the actual figure crushed that estimate at $375 million. Facebook’s total ad revenue for the quarter climbed 38% to $1.46 billion.

Facebook Home does not serve ads to users right now. But it will. And Facebook’s smart decision to focus on immersive mobile software instead of an own-brand smartphone or its own mobile operating system means that these ads will be served to far more people as Facebook Home adoption grows than they would have on a “Facebook Phone.”

In the first quarter, Facebook’s mobile MAU stat grew to 751 million users. That’s three-quarters of a billion people who actively use Facebook’s services on a mobile phone each month. Facebook Home puts Facebook front and center on users’ phones, which means that once Home ads roll out, users will likely interact with them even more if they’re done well.

Facebook knows how important mobile is, obviously, and it’s taking steps accordingly. Home is the first of several big mobile initiatives we’ll likely see from Facebook, and the percentage of Facebook’s revenue that comes from mobile products will continue to grow as well. The more innovative and immersive Facebook’s mobile products get, the higher they will drive revenue — and that is why Facebook Home exists.

Zach Epstein
Zach Epstein Executive Editor

Zach Epstein has been the Executive Editor at BGR for more than 10 years. He manages BGR’s editorial team and ensures that best practices are adhered to. He also oversees the Ecommerce team and directs the daily flow of all content. Zach first joined BGR in 2007 as a Staff Writer covering business, technology, and entertainment.

His work has been quoted by countless top news organizations, and he was recently named one of the world's top 10 “power mobile influencers” by Forbes. Prior to BGR, Zach worked as an executive in marketing and business development with two private telcos.