One Blue App Isn't Enough -- Now Facebook Wants to Be a Massive Internet Conglomerate


"We can help connect the next 5 billion people," Facebook CEO Mark Zuckerberg said in its 2012 annual latter to shareholders. Boldly, Zuckerberg continued:

Over the next five to 10 years, most people with feature phones will get smartphones. Some of them will get smartphones just so they can use Facebook to stay connected with family and friends. We feel it is a great opportunity -- as well as our responsibility -- to help everyone in the world get connected and join the modern knowledge economy.

Sure, the fact that Facebook wants to connect the world is old news. But unlike what many investors may have thought in 2012, Facebook doesn't plan to make this happen through one platform. Facebook wants to achieve this goal through a stream of new apps and acquisitions.

A new approach to connecting the world
With its $19 billion acquisition of WhatsApp this week, a cross-platform mobile messaging app, Facebook has made a clear statement: It will do whatever it takes to keep its major stake of ownership of the connected world.

As we are starting to see, Facebook's plan isn't isolated to its own brand. Not only does Facebook boast Instagram and, now, WhatsApp in its portfolio, but it's also embarking on a mission to launch a plethora of new apps. In a Bloomberg Businessweekarticle that focused on Facebook's 10-year anniversary and the social network's future plans, authors Brad Stone and Sarah Frier explained Facebook's new strategy.

First, Facebook considered building its own smartphones. Next, it launched software called Home that integrated into the Android operating system, which flopped. "Now it's concentrating on a third approach: stand-alone apps, lots of them." The initiative begins with its recently launched Facebook Creative Labs, a project that is home to where Facebook is "crafting new apps to support the diverse ways people want to connect and share," according to the project's description on Facebook's website.

"We just think that there are all these different ways that people want to share, and that compressing them all into a single blue app is not the right format of the future," Zuckerberg told Businessweek.

The first app to surface from the initiative was Facebook's February-launch of Paper, an app that combines the Facebook experience with personalized news.

Image source: Facebook's website.

Clearly, another part to this initiative is acquisitions -- although they'll likely be sparse compared with new app launches if they frequently necessitate price tags in the billions of dollars.

An Internet conglomerate with a mission
When Facebook went public, the main concern was whether Facebook could monetize its small newsfeed in a mobile app. But today investors are facing a new question: Can Facebook carry over its success in the Facebook app to other apps?

The major takeaway for investors is that investors need to stop analyzing Facebook as simply Facebook. It's time to start thinking about Facebook as a conglomerate with a mission to own a major stake of the connected world.

Facebook wants to be far more than Facebook.

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