This week on Wednesday, Facebook will kick off its two-day F8 developer conference at the Fort Mason Center in San Francisco, California, where the social network will share with developers how it plans to make more money out of its several business units and share these money with developers.
App developers are essential to Facebook because they create the third-party platforms that give Facebook more real estate for its more than a million advertisers. The social network is particularly interested in mobile, as a huge chunk of its advertising revenue comes from it, and many developers are interested in Facebook because it gives them a nice cut of the advertising dollars they make.
This year, more than 2,000 app developers are expected to attend, and Facebook could disclose a new mobile advertising distributor similar to MoPub, which was acquired by Twitter for $350 million last year. Analyst Gene Munster of Piper Jaffray, in a research note sent to clients, says Facebook's new product will allow developers to manage their business from a single location and view ad statistics in real-time.
If Facebook can keep users engaged on its own platform or on its partner developers' apps, it can make itself more attractive to advertisers and thus raise advertising rates.
"The more they can keep you engaged and locked in and consuming the ads, the more money they are going to make," says analyst Rob Enderle of advisory services firm Enderle Group.
At this year's F8, Facebook also plans on discussing how it will monetize the various platforms it owns, including Instagram, Messenger, and WhatsApp, which all have users running up to the hundreds of millions but have yet to generate profit for Facebook.
Instagram is on the move to create native apps that will get rid of the need for third-party apps, such as Pic Stitch, which allows users to create a photo collage. Messenger is also about to receive a big makeover, with the recent introduction of a peer-to-peer payment service and the upcoming inclusion of third-party apps, a handful of which Facebook might announce at F8.
"Facebook has bigger plans for Messenger," says Craig Agranoff, co-founder of digital marketing firm Gripd.com. "Sure, you can send pics and you can take video, but certain people - and we've seen this in Asia - they want third-party apps on this. They want the ability to buy different emojis and things that other people might find silly, but it's a tremendous moneymaker."
But Facebook is more than about advertising and mobile. At F8, it also plans to unveil its grand dreams for the future, including the drones, satellites, and lasers it will use to bring the Internet to people around the globe who still don't have access online via Mark Zuckerberg's ambitious Internet.org. Six countries, namely Columbia, Ghana, India, Kenya, Tanzania, and Zambia, and more than seven million people have already benefited from the project, and Facebook vows to bring Internet.org to 100 countries by the end of the year.
Developers can also expect to hear about Oculus VR, the virtual reality startup that surprised everybody when it agreed to sell itself to Facebook for $2 billion. Michael Abrash, chief scientist at Oculus, is expected to speak about the significance of virtual reality, but some people are hoping for a demo of what it's like to be on Facebook in virtual reality.
F8 "used to be such a thing where developers were so excited about building a Facebook Connect thing or a Facebook Page, and now it's evolved into this megaconference of all the stuff that Facebook has under its portfolio, which is really complicated," says Johnny Won, founder of tech consultancy firm Hyperstop.
Update: Facebook's F8 app has gotten ahead of itself and accidentally revealed what the social network has in store for the first day of the conference. As expected, Facebook will be unveiling Messenger as a Platform, which could allow developers to build their apps on Facebook's standalone messaging app.
Facebook also plans on using Parse, its app-building tool for developers, to help developers create new apps for Internet of Things devices. It's still unclear how Parse for IoT will play out, but pretty soon we could be receiving notifications from our smart ovens that our bread sticks are done.
Photo: Maurizio Pesce | Flickr
