Mobile Fix – February 3

Facebook Floats

As predicted Facebook have announced their IPO and the documents they provide as part of the process make interesting reading.

Advertising provides 85% of their revenue – down from 95% as revenue from Zynga grew to account for 12% of the total. (btw this news drove Zynga shares up by 16%). And new data shows that Facebook now accounts for 28% of all online display ads in the US – far ahead of Yahoo in second place with 11%.

But one quote from the risk factors is interesting for Fix readers;

“our revenue may be negatively affected unless and until we include ads or sponsored stories on our mobile apps and mobile website. We believe that people around the world will continue to increase their use of Facebook from mobile devices, and that some of this mobile usage has been and will continue to be a substitute for use of Facebook through personal computers.”

So, yes we will see ads on Facebook mobile before too long.

But there is a lot of work to be done to find a way to do that without negatively impacting the user experience on mobile devices.

One clear sign of their ambitions in mobile is the hiring of James Pearce to build relationships with mobile developers. James has been instrumental in building Sencha, the company that has driven the development of html5 and javascript tools to enable mobile webapps to get close to native apps in functionality.

Here you can read the full IPO documents for Facebook

Amazon stumbles

Following Apples stellar financial performance Wall Street was less than impressed with Amazon posting a decline in profits of 57% despite revenue being up 35% on the same period last year. And their forecast for the next quarter is essentially to break even.

The fall in profits is driven by a big hike in costs as they lose money on each of the Kindles they sell. And they are selling lots of Kindles – it’s the top selling product in most Amazon markets and has been since launch. And the Kindle Fire has got off to a great start in the US;

Kindle Fire is the #1 bestselling, most gifted, and most wished for product across the millions of items available on Amazon.com since its introduction 17 weeks ago

Another area that sucked up investment is the Amazon play in offers – LivingSocial lost over half a billion dollars – on sales of around a quarter of a billion. There do appear to be some extenuating factors in these figures though.

But their entry into appstores seems to be paying off with customers ‘nearly tripling’ whilst Flurry research shows that the Kindle Fire is accounting for around a third of all Android tablet sessions

Given the range of activities and strength of Amazon across so many areas we have to give Jeff Bezos the benefit of the doubt – he is investing for the future. Including surreptitiously buying a business that is a leader in speech recognition

You can download the full press release here

NewTV

Whilst the main focus for sports fans in the UK is obviously who will seize the challenge of managing sleeping giants Leeds United, in the US everyone is gearing up for the SuperBowl. As well as being very very long, it has long been famous for the ad breaks when advertisers usually launch new commercials.

This year is expected to be the first 2screen superbowl with all the players in social TV trying to maximise their impact. Shazam will be used by around half of the advertisers whilst Yahoo acquisition IntoNow has a partnership with Pepsi Max.

Fast Company has a good look at some of the key players in this space – but as long as the market is balkanised – with so many disparate players – the opportunity is limited.

We believe that any marketing strategy that requires people to use a particular app is doomed to be niche. Even with the huge installed base of Shazam, you’re effectively locking out a big chunk of the audience. Like last year, we suspect the big winners will be people who use search smartly.

Whilst on the topic of new TV, this story about a comedian who gets 5 million viewers to his twice weekly videos on YouTube is interesting. That sort of scale compares well to lots of satellite TV stations.

MySpace still hanging in there

Even though the big story in social (and mobile and advertising and .. well everything) is Facebook,  it is worth remembering that there is lots of others stuff happening in social. New research showed that MySpace is still a significant player – and still bigger than Google+. Tumblr has grown rapidly and has a high dwell time, but the most surprising thing is that Pinterest is now a top 10 social network – with huge growth in users over the last few months. And as well as having high dwell time it is also a huge traffic driver to retailers

This video interview with Twitter chief Dick Costello is worth watching too.

Brand Cathedrals

We are huge believers in the power of brand cathedrals – those retail experiences where people go to pay homage to the brand just as much as to buy. For the launch of 3 we pushed the idea of stores that were places you celebrated the breadth of content the network was to offer, but lost the pitch. Nike does it well, as do some fashion brands like Comme De Garcon with their Dover Street Market.

But no-one does it better than Apple and announcing a new hire to head up their retail business they say;

“Our retail stores are all about customer service, and John shares that commitment like no one else we’ve met,”

John is John Browett – currently CEO of Dixons. Obviously we’ve been going to the wrong Dixons stores.

Quick reads

No surprise that top VC firm Accel is keen to invest in mobile. This interview is a good take on what’s interesting the investors.

Games giant EA mobile sales are up 19% to $70m

Travel site Kayak was an early entrant into mobile and they’ve now decided that they are a mobile first company, with the new design of their desktop website taking its cues from their mobile properties. We are going to see this more and more – especially as responsive designbecomes better understood.

And ESPN have now decided that mobile isn’t the third screen – it’s the first screen.

By 2020 we’ll have 24 billion connected devices – a good infographic.

Google have added impressive new capabilities to Maps and Google Earth

This is an interesting take on how Google and Apple have very different approaches to innovation

This is a clever use of QR codes that will be copied endlessly.

Finally

I believe that over time, we will see the increase in the cost of advertising moderate. There are just so many different media available today and we’re quickly moving more and more of our businesses into digital. And in that space, there are lots of different avenues available. In the digital space, with things like Facebook and Google and others, we find that the return on investment of the advertising, when properly designed, when the big idea is there, can be much more efficient.

P&Gs CEO on an analyst call this week.

We agree.

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