Phoning a Friend?

 | Apr 04, 2013 | 9:00 AM EDT
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This afternoon at 1 p.m. EDT, Facebook (FB) will supposedly be making a big Android announcement. No one knows exactly what the announcement will be, but one leading guess is that we'll finally hear about a "Facebook Phone" co-branded with HTC on the Android platform.

Facebook has been trying to get most of its employees to start using Android for some time, given that a majority of their users are on that vs. Apple's (AAPL) iOS. Up until now, a large majority of Facebook employees remain tied to their Apple iPhones and Facebook management has worried this might cause them to miss the shift that's going on to Android.

It sounds like today's announcement will be about a revamped HTC/Facebook phone. You might not remember, but HTC first came out with a phone with a Facebook button on it a couple of years ago. Since then, HTC has plummeted in profitability and market share. I would argue this new Facebook/HTC phone is more important to HTC than Facebook.

Still, it is the latest sign that Facebook may be interested in launching its own phone. I'm a big believer they should to increase their relevance and to be able to attract more usage. If the company could find a way of creating a new kind of phone -- think of the old Sidekick -- that really brought out some key Facebook features, it could really bring something new to the phone wars.

When I wrote an article a year ago about why Facebook could disappear in five years (like Yahoo! (AAPL) has "disappeared"), it was right before its IPO. People were enthralled with how the stock would trade between $70 and $100. A lot has changed in a year's time in terms of the perception of the company.

My big point then -- and I still believe it today -- is that Facebook is a big monolithic website that was born in the web age and not the mobile age. So when exciting new services come along (such as Instagram, SnapChat or WhatsApp), Facebook's instincts are to buy them and attach them to their big site or to copy them.

What we've seen in the last year is that Facebook's continuing expansion hasn't necessarily increased usage or made it cooler. But these small little stand-alone apps (who don't agree to be bought out by Facebook) are growing just fine.

Every new app born in the mobile age doesn't have the web baggage that Facebook has, so they're inherently taking more advantage of the mobile interface and are "cooler" right away.

Facebook's instincts are to throw more ads and more services at their users to increase usage and make more money; however, I think they're going to hit an upper limit of what users will tolerate. I think Facebook will still be around and making money -- just like Yahoo! is today.

However, Facebook will lose its place as the darling of social media. I think there will be five or six other young companies who will emerge and be viewed as the kings of the mobile/social sector more than Facebook will.

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