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OTTs on the Money: Facebook Looks to Stand-Alone Derivative Apps to Drive New Revenue

| Feburary 19, 2014 | Consumer Services |
| Analyst: Lynnette Luna, Senior Editor, Consumer Services

Facebook is the world’s largest social network, and tries to be everything to everyone. But other single-purpose apps do a better job at sharing photos, enabling people to communicate with friends, delivering news and enabling people with niche interests to connect. Facebook’s move to introduce a range of new, standalone mobile apps aim to combat the threat of niche offerings and drive new revenue from advertising. The move offers more competition to carriers in the realm of communications, entertainment and commerce.

The assumption is that Facebook’s future standalone apps will be more functional and communicative in nature, an unbundling of sorts of Facebook’s core features that users engage with on a daily basis—a threatening prospect for carriers. But it also provides opportunity for carrier partnerships, ranging from pre-installed placement on phones to more complex features such as in-app payments. However, while it is clear users want mobile access to their Facebook pages, it’s not a sure thing that they will flock to Facebook’s standalone apps in the same way.

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