The One Mobile Stock to Bet On

How close is Facebook to becoming an operating system? It's time to ask. According to TechCrunch, the social-networking superstar is working with handset makers to create a phone tailored to its platform. Facebook denies the report.

"Facebook is not building a phone," an unnamed company spokesperson told PC Magazine yesterday. "Our view is that almost all experiences would be better if they were social, so integrating deeply into existing platforms and operating systems is a good way to enable this."

This, Fools, is what former PR guys like me call a non-denial denial. Or maybe everyone calls it that. The point is, Facebook is only saying it isn't working on a handset. Well, duh. Of course Facebook isn't working on a handset. The company's expertise is software, not hardware.

Hardware isn't the issue. Instead, a Facebook "phone" would be a mobile interface in which your Facebook account would be the home screen, with a "dialer" embedded in your contacts list. Click a contact to call, text, chat, or email.

Admit it, Facebook: TechCrunch's report makes sense.

How Facebook is like an OS
Facebook already acts like an operating system. There's an interface for programming software. There's a developer community. There's messaging and email. And most important in the mobile world: It's a location-aware service.

Mobile matters to Facebook. Of all the devices we humans use to connect, the phone is the most social. We use it to talk, chat, tweet, text, shoot and share photos, and more. Why would Facebook leave it to OS makers Apple (Nasdaq: AAPL  ) , Google (Nasdaq: GOOG  ) , Nokia (NYSE: NOK  ) , and Research In Motion (Nasdaq: RIMM  ) to build a social interface for mobile users?

Reverse-engineer that thought for a minute. Say the rumored Google Me social network is true. What would Google do with it? How would it transform Android? I think the changes would be subtle, but significant.

Rise of the social address book
First of all, your contacts list would become your social network. Seems simple, doesn't it? But the truth is this is how it's always been. The minute we started a Rolodex or an address book, we were building a social network. Facebook, Twitter, and others made our networks more interactive by connecting us digitally. Google, with Google Me, could take the idea full circle.

Second, once you make an address book social, it creates more intuitive and real-time ways to connect with friends and associates. Take location awareness. Say you have a friend who's near a store you'll be shopping at later in the week. Sending her a timely text from your contacts list might help with your bargain hunting.

Finally, a social address book would allow you to set preferences for how and when you'd want to be reached. A simple example: Each time you have a meeting booked in Google Calendar -- and have the time marked as "busy" -- Google Me knows to send all calls to voicemail as well as mute all email and IM notifications.

This same idea applies equally to Apple's iOS, Nokia's Symbian, and RIM's BlackBerry. Now tell me that doesn't scare the beejeezus out of Facebook CEO Mark Zuckerberg. You and I both know it does.

The one mobile stock to bet on: Google
Facebook is in danger of being disintermediated by a social network that tightly integrates email and digital-contacts management, the two features that helped Palm to birth the smartphone industry with the Treo.

As you've probably already guessed, I think Google Me could be that network, and I think it could destroy Facebook.

Of course, it would take years for that to occur. What's more, I think Facebook could avoid destruction by creating the sort of cheap yet social phone interface TechCrunch described in its disputed report. Pick up the phone while you still can, Mr. Zuckerberg.

Now it's your turn to weigh in. Should Facebook create a phone? Please vote in the poll below, and then leave a comment to explain your thinking. And don't forget to come back and see how your peers are voting.

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Fool contributor Tim Beyers is a member of the Rule Breakers stock-picking team. He had stock and options positions in Apple and a stock position in Google at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. The Motley Fool owns shares of Apple and Google and is also on Twitter as @TheMotleyFool. The Fool's disclosure policy needs a ward. Know anyone?


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  • Report this Comment On September 27, 2010, at 2:42 PM, Aeoran wrote:

    The thesis (last sentence, previous) makes absolutely zero sense. Please kindly illuminate your line of reasoning.

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