On Monday, Facebook (NASDAQ:FB) joined the GSMA, Facebook's first and so far only membership in a wireless trade organization. No other social networking company is currently a member of the GSMA. Does this mean we should expect other Internet companies with major mobile presence or ambitions to follow suit?
I'd say probably. It seems logical that they would, if one thinks about why Facebook joined the GSMA in the first place, which, according to analysts I spoke with, was largely a business development move. Facebook realizes its future is in mobile and it wants a seat at the table.
Dan Rose, vice president of partnerships at Facebook, gave the official line, explaining that Facebook joining the GSMA "reflects our focus on mobile and our continued desire to work closely and collaboratively with partners in the industry, and we look forward to playing an active role as a member."
"It's getting in on the ground floor," 556 Ventures analyst William Ho said. "They know that mobile is the core business in the future. Any so any influence or any insight into the goings-on or how to shape the industry is beneficial."
Joining the GSMA fits with Facebook's larger mission of getting people online and using its service (so it can sell them ads). For example, in August Facebook forged a partnership with industry heavyweights Ericsson, MediaTek, Nokia (NYSE:NOK), Opera Software, Qualcomm (NASDAQ:QCOM) and Samsung Electronics to launch Internet.org, a coalition dedicated to expanding online access via mobile. "Facebook, in the end, has the same goal as the wireless carriers: connect every human being. And so I think the goals are pretty congruent," said Recon Analytics analyst (and FierceWireless contributor) Roger Entner.
Facebook is a unique social networking and Internet phenomenon. The company said it had 874 million mobile monthly active users as of Sept. 30, an increase of 45 percent year-over-year. Mobile daily active were 507 million on average for September 2013. The GSMA benefits from bringing Facebook into the fold, and being associated with a brand consumers embrace.
"There have been various GSMA-backed initiatives to get the operators into a more favorable position in the over-the-top service game. And Facebook is nothing if not the ultimate over-the-top service," said IDC analyst John Jackson. "It makes sense for them (Facebook) to understand what the operators are thinking. And the operators can only benefit from a closer understanding from what Facebook, as a metaphor for many over-the-top services, actually wants from them or needs from them."
Yet just because Facebook has a huge mobile presence, that doesn't mean other Internet companies wouldn't benefit from joining the GSMA--and vice versa. Google (NASDAQ:GOOG), Amazon (NASDAQ:AMZN), Yahoo and Twitter are not members of the GSMA. Neither is Apple (NASDAQ:AAPL), though that's slightly less surprising. Perhaps these companies believe don't need the GSMA. Apple and Google are certainly behemoths in their own right and have been fairly agnostic in their dealings with carriers. Yet they all have a vested interest in knowing how the mobile market is going to evolve and what carriers think about that--and them. It might be less altruistic and more cynical. Or, as Ho put it: "How does that GSMA membership benefit my corporate strategy?"
Jackson suggested that any social networking or media distribution company would benefit from having a seat at the table with wireless carriers. "It's a mobile future and mobile networks are going to be the transport mechanism," he said. "And the closer you can get to how those are likely to work, and what those folks who own them are thinking, the better prepared you will be."
More broadly, including more Internet companies in the GSMA membership would get the carriers out of an insular mindset that treats over-the-top players as enemies. "You have a broad pool of interests that are in some instances competing and in many others, aligned," Jackson added. "So I think it's important to have a forum to hash through them."
Additionally, adding Internet companies as members could lend operators heft with regulators, as they can point to the fact that they are, in fact, working together and not at odds. "Wireless is more than carriers," Entner said. "The carrier community that is largely running the wireless industry associations and the ancillary companies would benefit from having a bigger tent. Both would have more impact combined than separate."
In other words, they should friend each other.--Phil