Facebook Just 'Hijacked' Google's OS
In fact, HTC will ship a brand-know phone, known simply as "First," that will come with Facebook Home pre-loaded onto the device.
Not everyone had a positive outlook on the announcement, however. While Facebook Home should prove to be beneficial to the social networking giant, it could be detrimental to Google (NASDAQ: GOOG).
"Facebook has hijacked the screen," Trip Chowdhry, the Managing Director of Equity Research at Global Equities Research, told Benzinga shortly after today's event. "The first and foremost interaction that you do will be on Facebook."
Chowdhry clarified that this does not apply to every user. "But a significant number of people who use mobile phones only use them for [a few] things," he said. One of them is social networking.
"If you, as a user, the first interaction that you have with a phone is with Facebook Home, your experience is controlled by Facebook," Chowdhry added. "Remember: technology is a commodity. Now you, as a user, interact with Facebook as an application. Facebook tells you where to go next. Facebook tells you what are the good applications to launch. Facebook controls the engagement."
Consequently, Chowdhry believes that Facebook will know what the user is doing, gain access to his or her location, decipher who the user communicates with and use this information to deliver customized advertisements.
While Facebook Home will be ad-free when it launches on April 12, the company fully intends to place ads on the Home screen at some point in the future.
"Pretty much Google has been totally blindsided," said Chowdhry. "This is a classic case of a company being complacent while living in the past."
Chowdhry was critical of Andy Rubin (one of the original creators of Android), who was demoted last month. He said that Rubin made three key mistakes:
1) "[He was] very focused on tech, not worrying about the user." 2) "He totally disregarded the licensing terms." 3) "He ignored the early warning signs that came from Barnes & Noble [(NYSE: BKS)] and Amazon [(NASDAQ: AMZN)]."
Both Amazon and Barnes & Noble use forked (modified) versions of Android that heavily bypass Google and direct users to their own respective apps and marketplaces.
Chowdhry estimated that Facebook has put one-fifth of the effort into Facebook Home that Google has put into Android.
"This is a fundamental breakdown for Google's perspective on…the business direction," he said.
Louis Bedigian is the Senior Tech Analyst and Features Writer of Benzinga. You can reach him at 248-636-1322 or firstname.lastname@example.org. Follow him @LouisBedigianBZ
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