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CTIA: Facebook founder challenges operators to open networks

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SAN FRANCISCO--Facebook co-founder Dustin Moskovitz told operators to “leave some money on the table” Wednesday in his keynote plea to the wireless industry to open up their networks and only seek service revenues in areas where they offer true added value to the mobile Internet experiences. Only under those conditions will wireless content services flourish, Moskovitz concluded.

As an example, Moskovitz pointed to the desktop computing and Internet industries for operators’ inspiration. Companies like Apple and Microsoft have built open computing platforms that other companies build programs on, just as Google has built an open Internet platform for others to develop Web-based applications, Moskovitz said. Facebook views itself as an open social networking and user-generated content platform on the Web, and it would like to extend that model to the mobile Internet, he continued, but carriers’ closed systems prevent that. Operators’ insistence on authorizing every application installed on the device as well as collecting revenue for each service, he said, stifles creativity on, and adoption of, mobile Internet services.

Instead of authorizing each application running over the network, carriers should open the network to all applications, and instead of trying to collect service revenue on every application that traverses the network, carriers should seek revenue sharing deals only where they add true value, Moskovitz said.

“The good news is, if you move now, you have an enormous opportunity to be disruptive in the industry,” Moskovitz said. If carriers don’t choose to be a disruptive force, he added, someone else will. Apple and Microsoft are moving their own operating systems onto the mobile device in an effort to find a platform for their services. Other Internet-age companies are following suit, Moskovitz said, pointing specifically to Google’s interest in pursuing spectrum in the 700 MHz auction and the possible launch of a Google mobile device. “Google is going to make a move, and it’s going to big, and I bet it’s going to be open.”

Moskovitz’s singling out of Microsoft in particular is probably no coincidence, considering that shortly after his morning keynote, Microsoft announced a $240 million deal for a 1.6% stake in Facebook. The deal values Facebook at about $15 billion—not bad for a company expected to bring in only $150 million in revenues this year. Microsoft is paying almost $5 for each of Facebook’s roughly 50 million users and a big premium over the $580 million News Corps paid for MySpace last year. Microsoft obviously sees huge growth prospects for the social networking community, giving it capital for massive expansion plans. And as Moskovitz hinted at CTIA, a good deal of those funds will likely go into expanding Facebook’s mobile presence.

Facebook already has a mobile presence through a WAP site and through basic SMS and MMS services, allowing customers to upload basic content like pictures, video and text as well as download the same from other user profiles using short-code requests. But the rich applications that populate most of Facebook’s profiles are still off-limits to the majority of mobile users. Oddly, the company Facebook has started working with to rectify that isn’t Microsoft but the Redmond giant’s competitor in the mobile e-mail space: Research in Motion.

Facebook and RIM today announced the availability of a downloadable app that replicates several of Facebook’s online features on BlackBerry devices. T-Mobile has signed up to load the application onto its BlackBerry lines, but Moskovitz pointed out that, as a smartphone application built on RIM’s platform, any BlackBerry owner can download it. Facebook was able to integrate with RIM’s push e-mail technology and OS to create a much richer application, Moskovitz said, and it could do the same with non-smartphones if operators would open more of their networks to Facebook and its developers.

Moskovitz’s dressing down of carriers may be based on the assumption that all consumers want an open network, though. His parallel between an open wireline Internet and an open mobile network may be over-simplified, said Mikael Vinding, CEO of Streamverse, a developer of carrier social-networking applications that integrate back to online communities like Facebook and MySpace. The critical difference between the two networks is that using applications on the broader Internet for all practical purposes is free, but delivering any application or content over the mobile network carries an associated data charge.

“[Moskovitz] is talking about creating apps on an open mobile environment, but we’re the ones paying for them,” Vinding said. Streamverse’s approach is to encourage users and developers to create unique applications and distribute them, but within certain frameworks. The company’s platform supports several shell applications that perform basic functions like creating SMS-based chat, RSS feed, polling and content subscription services. Users then can use those generic applications to create their own personally tailored apps such as a fan-club newsletter or a simple picture poll. Operators only have to authorize the individual applications modules once, while users are free to customize them as much as possible, Vinding said.

“We should have some control over the network, but carriers should start trusting their customers more,” Vinding said. “It should be open, but it can’t be a free-for-all.”

Even Streamverse’s carrier-developer compromise runs into limitations, though. The closed interfaces in the operators’ networks and the proprietary operating systems on their phones limit the reach of any application no matter how much cooperation an operator may give a developer. Streamverse’s platform only utilizes MMS and SMS, since those two delivery methods are the only two relatively open systems across all carriers’ networks. But even embedding a simple link in an SMS message runs into problems. Verizon Wireless’s walled garden WAP deck, for instance, renders outside links useless.

As a result, social-networking app developers, instead of looking to work with carriers, are simply trying to work around them. 3Guppies builds widgets for MySpace and Facebook that allow for photo and image sharing between the two social portals and any mobile phone. When 3Guppies CEO John Dearborn says any phone, he means any phone—the company has developed a method to bypass any walled garden or closed platform that would prevent its picture-sharing from coming through. With Verizon it embeds its photos in MMS. For operators supporting open access to WAP, it triggers a WAP download through a link embedded in a text message. Once the photo is on the phone, it can be used as wallpaper or sent to others in the social community.

From Verizon Wireless’s perspective, the customer has just bypassed its wallpaper store and photo-sharing service, but it’s looking at it the wrong way, Dearborn said.

“I just sent 15 MMS messages demonstrating this service,” Dearborn said. “I didn’t pay them anything for wallpapers, but I probably just accrued $7 in data charges. Which is better? … Nothing I say is going to make Verizon move any faster. Nothing Facebook says is going to make Verizon move any faster. But until they move, we’ll just keep finding cracks in the garden walls.”

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© 2008 Penton Media Inc.

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