The Herald Bulletin

Morning Update

Breaking News

April 4, 2013

Facebook unveils 'Home' for Android mobile gadgets

(Continued)

MENLO PARK, Calif. —

Apple had no immediate comment.

For Google, the announcement isn't great news. The company gives away its Android software for free, in the hope that it will steer phone users to ads Google sells. With Home, Facebook is inserting itself between users and Google, diverting them to its own ads and services. It's not the first time a big Internet company has co-opted Android: Amazon.com's Kindle Fire tablets run a version of Android that strips out all Google services, replacing them with Amazon's equivalents.

The deeper mobile integration will help Facebook to attract more mobile advertisers. Though mobile ads were a big concern for Facebook's investors even before the company's initial public offering last May, some of the worry is subsiding as the company muscles its way into the market.

Last year, Facebook began showing ads to its mobile audience by shoehorning corporate-sponsored content into users' news feeds, which also include updates from friends and brands they follow. Facebook now faces the challenge of showing people mobile ads without annoying or alienating them.

At this early stage, advertisements are not part of Facebook's Home. Ads "are something we look forward to doing a great job with," said Cory Ondrejka, director of mobile engineering.

He said Facebook won't start showing ads "until we are sure we got it right."

That time will certainly come. The mobile advertising market is growing quickly, thanks in large part to Facebook and Twitter, which also entered the space in 2012. Research firm eMarketer expects U.S. mobile ad spending to grow 77 percent this year to $7.29 billion, from $4.11 billion last year.

Facebook, meanwhile, is expected to earn $1.53 billion in worldwide mobile ad revenue this year according to eMarketer, up from $470.7 million last year.

Facebook's stock rose 85 cents, or 3.2 percent, to $27.10 in afternoon trading following the announcement. It's still nearly 23 percent below its initial public offering price of $35.

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