Thursday, January 17, 2013

A seemingly small change in Facebook functionality will trigger an avalanche of huge disruptive changes

Let us predict the main consequences of yesterday’s move of Facebook into VoIP: they will go far beyond those for Microsoft and Skype. Facebook's move it will mean nothing less than merging the entire VoIP, messaging, and indeed also mobile telephony into social networks.


Facebook's iPhone users in the U.S. can now make calls to each other through the Facebook Messenger app anywhere they have a Wi-Fi or cellular data connection, avoiding carrier charges. Facebook said it was working on adding the feature to its Messenger app for Android and BlackBerry users. Right now, calls can only be made to another user who has Messenger installed on their iPhone. Users can not call a landline number, and they cannot even call a Facebook friend who is using Facebook via web browser.
This move will have much broader consequences than is immediately apparent. Let us mention here the three most important:
Bell's Telephone
  1. Microsoft is out of the Messaging / Telephony game because once messaging merges with social networks, MS will be unable to compete in this field with heavyweights Facebook and Google. This is indeed a bad news namely for Skype and Lync. With its acquisition of Skype in May 2011 for US$8.5 billion, Microsoft bought namely users (because similar technology Microsoft already had, and even in the form of three different applications: Windows Messenger for common users, Xbox Live for Xbox users, and Lync for corporate users). But these expensively bought users will now switch to Facebook (or Google+), which they already use anyway. This step will be only logical from their point of view, as it will allow them to get rid of the need to use two separate applications for similar functionality.
  2. Google will become the biggest competitor of Facebook, thanks to its Gmail, Google+, and related voice and videotelephony services. Let us recall that Google has a head start here: it is offering video calls already since its launch of Google+ in June 2011, and since March 2012 it even offers free calls from Google+ to ordinary telephone numbers in the US and Canada. The battle between Facebook and Google will be very balanced - both competitors have chances for victory. Facebook has more users, while Google has better technology, namely in messaging where Facebook up till now depended on technological partners.
  3. Last but not least: This move is indeed very bad news for telephone operators. VoIP ceases to be a technology used only by enthusiasts and becomes a mainstream commonplace. A typical user will prefer to call his friends directly from his favourite social network, no matter whether he is on computer or mobile phone, as it will be indeed much simpler than manually dialling the number on his phone (in case he is on computer) or leaving the application in order to make a call (in case he is on mobile). Using VoIP instead of carrier voice telephony will thus no more mean any complication for a user. The opposite is true: VoIP calls will be simpler and more convenient, offering additional related services. At this moment, billing based on length of the calls and their distance will become history, and so will become the voice telephony service that was the main cash cow of telcos for more than a century.

A seemingly small change in Facebook functionality will thus likely trigger an avalanche of huge disruptive changes in several important sectors.

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