Facebook as the new AOL, walled gardens and reverse innovation

The announcement of Facebook for Every Phone reaching 100 million users is really impressive. It’s astounding that the technology exists to actually deliver some of the core features of Facebook (photos, news feed, messenger) onto “dumb” (feature) phones. The technology is from Snaptu, that Facebook acquired in 2011.

Jonathan Zittrain, in the APM Marketplace Tech podcast the other morning, mentioned one consequence of this, which is the possibility that Facebook would be the new AOL, as a walled garden for many users. As we’ve heard before, for many users in developing countries (can we please soon come up with a better, less-condescending term for the countries that provide almost half of the world’s GDP growth?), Facebook IS the Internet. As many users in the 90’s can testify to, using only AOL or Compuserve soon started feeling limited. But since we recently saw that there are still people on AOL dial-up (!) I guess Facebook will be able to maintain revenues from that walled garden for quite some time.

There is also another Facebook initiative, Facebook Zero, that aims to bring Facebook features to phones using no data at all, just text.

What is most interesting about these is what we can learn from them about reverse innovation, i.e. what Facebook can apply from their slimmed-down products to their richer, “developed world” products.  Reverse innovation has been used successfully by companies such as GE and Unilever that have large presences in developing markets where the parameters for competition are very different, such as India. To be mean, for Nokia, it seems their reverse innovation (also quite a loaded, non-PC term btw) has gone in reverse, since their only good innovations are in developing countries, and their innovations in developed markets is now innovation for innovation’s sake, not for any consumer need. We could all benefit from a faster-loading Facebook app on our iPhones.

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