This past week, Facebook made a couple of 'mobile' announcements, which I think reveal a significant amount about competition in the mobile space. One of the announcements was a new service called 'Deals,' which is essentially a location-based rewards service that awards users with discounts when they check-in to various locations. The other major announcement involved Facebook partnering with companies like Loopt, Zynga, Groupon and Yelp, to offer mobile users a "single-sign on." Essentially what this would allow users to do is login once (using their Facebook login) to have access to all these other services (as well as Facebook) via their mobile phones.
These announcements led me to draw a couple of insights about the nature of competition in this space:
1. If you're out numbered, it may benefit you to join forces - Facebook has over 500 million users. Simple math dictates that a user base of this size would lead to a much larger amount of social information for anyone who interacts with the Facebook network. Based on this idea, it made complete sense for companies like Groupon and Loopt to partner with Facebook because it would help grow their own user base. For instance, Loopt users can now see where their Facebook friends are and interact with them easily; whereas before, they were only limited to their Loopt friends. Essentially what Facebook has done is created a massive network effect for all the companies that have chosen to partner with it. From the point of view of the customer, this is a huge benefit because of newly created ease of social connection (which is ultimately what all these services are driving to increase).
2. (Forgive me for being slightly misleading but this second insight is really more of a question) If you're a new start-up service that is looking to build a user base quickly... do you have any choice other than to partner with Facebook? Or to put it a slightly different way... is Facebook the all-mighty social power? I think this question cannot yet have a definitive answer. Though I have to acknowledge that based on recent announcements and acquisitions by the Company, it seems as though Facebook is quickly becoming the all-in-one solution for everybody's social needs. There were some rumours a few months ago about the possibility that Google may launch their own social networking platform called Google 'Me' ... however it seems as though they remained as rumours. I think it would be very interesting if a company with another large user base managed to develop a platform that would rival Facebook, but for right now it seems as though Mark Zuckerberg and his team are running away with the social glory.
Final Thoughts: Think about the consumer first, then look at your competition. What if you joined them rather than fought them? Would it ultimately benefit the consumer? Would it ultimately benefit you? If so, the choice is simple: If you can't beat 'em, partner with 'em.