This Is Facebook's Mobile Future -- And Yours

Facebook acquired a small data compression company, which points to harvesting even more information about you.

Jun 17, 2014 at 8:30PM

In HBO's Silicon Valley, a start-up fights to create a business around data compression. The show sits right on the edge of reality and parody with outrageous personalities, barely pronounceable start-up names, and millions of venture capital dollars thrown around. What viewers may not know is that a real company has already created a data compression service, which Facebook (NASDAQ:FB) acquired last October for $120 million.

The company, Onavo, offers data compression to mobile users to help them conserve data usage and stay under their cellular plan's limits. By compressing images and other data and serving it through Onavo's private network, Onavo users can make the most of their data caps.


The path of the Internet to your phone using Onavo. Source: Onavo's website.

Because all of a user's mobile traffic routes through Onavo's servers, Onavo has an intimate knowledge of a user's behavior, app selection, and web history. This goldmine of information is more than Facebook could gain through its traditional services. And this is the future of the advertising-based web industry.

The history of 'privacy'
With the old Internet, websites were only able to track your behavior when you visited them. A website like Google (NASDAQ:GOOG) (NASDAQ:GOOGL) could only know what you searched for and subsequently clicked on. Then, little files stored on your computer called cookies made it possible for a website to track you across other websites. As other sites implemented Google Analytics to track their own traffic, and allowed for users to login with Facebook or make comments with their Facebook account, Google and Facebook could compile even more user data.

Taking control of the rest
Now, Google is building out its own fiber network to bring the Internet directly to consumers. Currently in Central Kansas City, Missouri, Kansas City, Kansas, Provo, Utah, and Austin, Texas, with plans for nine other cities, Google Fiber charges $70 per month for speeds up to 1 gigabit, and a free tier at traditional broadband speeds for only the cost of a $300 installation. The privacy policy for Google Fiber has apparently changed since 2011 when Google Fiber's terms of service used to state that it "does not store the content of your online communications or the content of data transfers." The current privacy policy for Google Fiber now does not associate your browsing data with your Google account (except by consent or law), but Google can harness the anonymous data to build advertising profiles.

While Facebook isn't building a fiber network for consumers, the acquisition of Onavo represents another way to capture all of a user's web traffic, especially as we consume more content through mobile devices. The value to a user is real, as those in developing countries buy more smartphones and those in developed countries hit data caps. And for many users, giving up such data isn't a big deal.

In search of new revenue
In the past, Facebook and Google have monetized the most obvious aspects of their business. A person searches for shoes, so display shoe ads. A person 'likes' a shoe brand, so display shoe ads. Now, with advertising data too dense for a human to sift through, algorithms will learn which consumers to target for a certain brand or product based on the whole of their browsing data -- not just the slice of web activity that these companies used to have.

A person viewed a tweet with a picture of a shoe on their phone? Display a shoe ad on each app and website they use. Through controlling the beginning of the Internet pipe, mobile or otherwise, these companies will become scarily efficient with advertising.

Think of the advertising possibilities in wearables
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!

Dan Newman has no position in any stocks mentioned. The Motley Fool recommends Facebook, Google (A shares), and Google (C shares). The Motley Fool owns shares of Facebook, Google (A shares), and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Money to your ears - A great FREE investing resource for you

The best way to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as “binge-worthy finance.”

Feb 1, 2016 at 5:03PM

Whether we're in the midst of earnings season or riding out the market's lulls, you want to know the best strategies for your money.

And you'll want to go beyond the hype of screaming TV personalities, fear-mongering ads, and "analysis" from people who might have your email address ... but no track record of success.

In short, you want a voice of reason you can count on.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich," rated The Motley Fool as the #1 place online to get smarter about investing.

And one of the easiest, most enjoyable, most valuable ways to get your regular dose of market and money insights is our suite of free podcasts ... what we like to think of as "binge-worthy finance."

Whether you make it part of your daily commute or you save up and listen to a handful of episodes for your 50-mile bike rides or long soaks in a bubble bath (or both!), the podcasts make sense of your money.

And unlike so many who want to make the subjects of personal finance and investing complicated and scary, our podcasts are clear, insightful, and (yes, it's true) fun.

Our free suite of podcasts

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. The show is also heard weekly on dozens of radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable. Rule Breaker Investing and Answers are timeless, so it's worth going back to and listening from the very start; the other three are focused more on today's events, so listen to the most recent first.

All are available for free at

If you're looking for a friendly voice ... with great advice on how to make the most of your money ... from a business with a lengthy track record of success ... in clear, compelling language ... I encourage you to give a listen to our free podcasts.

Head to, give them a spin, and you can subscribe there (at iTunes, Stitcher, or our other partners) if you want to receive them regularly.

It's money to your ears.


Compare Brokers