Mobile Centric World: Apple, Facebook, Yahoo- who wins?

I recently penned a column wondering what the world who like if we were to cut broadband access, and began accessing the Internet solely from mobile devices.  The reason behind these thoughts were because Google represents a good chunk of my portfolio, and I love to play devil’s advocate to see what new paradigms or competition might be looming.
My biggest fear is that Google’s moat around desktop search might be altogether bypassed by the likes of Apple’s Siri, or some new mobile applications yet unheard. While having Android certainly puts Google in just about the best possible position to deal with these challenges, based on Google’s relatively low multiples as compared to current growth, it seems as though the big money is factoring in the upcoming mobile competition into its price.
Unlike a Warren Buffett investment in Dairy Queen, See’s Candies, or a railroad, the king upon the technological throne gets overthrown far more rapidly. That being said I thought that I would evaluate and imagine how other companies might adapt to a mobile-centric world.

Video: Facebook, Apple, or Yahoo Who Wins and Loses in a Mobile Centric World

1) Facebook—the company is still in its infancy stages of monetization of its traffic.  Zuckerberg has concentrated heavily on desktop, and the fact that Facebook has been on is on shaky ground in regards to monetizing mobile is a large part of the reason the stock has swooned since its IPO.  Several ways that they might undertake to monetize their ever growing mobile market.
a) Charge a monthly fee for access, maybe something along the lines of a $1.99.  While this certainly isn’t usurious, I believe it unlikely they choose this direction for fear of alienating their giant customer base Zuck and co. have worked so diligently to build.  As I stated before, the biggest competitive advantage that Facebook has is its ubiquity of use, and Google Plus would jump all over Facebook users like a loose ball during the NBA finals. – Unlikely.
b) Inserting advertisements into our timelines-  Certainly part of the scenario, but again, I do believe that Facebook intentionally under-monetizes is its services for fear of alienating their customers.  I believe that this rollout will be slow, and like boiling a frog in water, the temperature rising over a long period of time, allowing users to acclimate themselves to the new reality.
c) Location advertising- Much like I anticipate Google doing with their Android users, ads can be delivered based upon our location and proximity to businesses we might wish to frequent.  Perhaps this is why we’re hearing rumors of a Facebook branded phone, with their own operating software.  I believe they’re a little late to the game, and would face an uphill battle.  I also anticipate Facebook creating their own search engine, enabling them to take better advantage of moment of impulse by the user.
If I’m just on Facebook to find out what my friends are up to, I would be far less receptive to  an advertisement than if I was searching for “pizza” while driving around an area.
While I do believe that Facebook will make strides in monetizing mobile, possibly in a way none of us are currently a imagining, I’m very wary of a super bullish call in this regard, because none of my friends go on Facebook to shop, and we're all especially un-receptive to mobile ads.  Perhaps this will change in time, as all these great services that we are currently getting almost for free, need to turn a profit, or stop existing.  Even software has its maintenance fees.

2) Yahoo—the company has not adapted in just about any way to the emerging technologies.  They have been in a lull, dealing with management issues, and will likely be selling off their company piece by piece to bigger competitors.  (AliBaba,  Microsoft) while I often access Yahoo from my desktop, I have given up trying to do so on my mobile.  If the world were to cut the broadband cord, I anticipate traffic to Yahoo drying up, until it becomes a small pool of water in the middle of a vast desert surrounding.

3) Apple- best positioned because it has very little to lose on the desktop side.  With the iTunes and Apple Apps store accessible from the IPhone since its early days, Apple need only concentrate on continuing to make the best hardware around.  Siri has been called a Google killer, and although that Google is still Apple's default search engine, for which big G pays a pretty penny, this may change in the future as Siri evolves.

One thing is for certain, and the ever changing world of technology, investors must stay abreast, and do their best to anticipate the changing marketplace.  It is no easy task.  If any of you have any added insights, I would love to hear them.


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