Following reports in June that Facebook would bring its payments system to mobile browsers, Bloomberg reports that the social giant is in talks that would bring Credits to smartphones and tablets.
If the full extent of the rumors of Facebook’s mobile HTML5 initiative — Project Spartan — are correct then the first thing that Facebook will need is a payments system. Part of what makes Apple so powerful and what Google recognized years ago is that if a company has the payment information of users, it yields a lot of influence on people’s online activities. Credits are not a new product from Facebook, but just as Google has done with the Android Market and the upcoming Google Wallet, the next step in developing a payment system is to make it ubiquitous. If users do not have to think about inputting there payment information every time they make a purchase, it is a lot more likely for them to buy the product that is click away.
Project Spartan, which was first reported by TechCrunch, is supposed to be Facebook’s initiative to break the monopoly of the application store model. The plan is to build an application ecosystem on the browser through HTML5. That means you will eventually be able to play CityVille and all your favorite Zynga games from the browser of your smartphone or tablet without having to leave Facebook.
Facebook’s new mobile application ecosystem should especially be a boon to Zynga, which is tied deeply to Facebook and does not yet have any significant revenue coming from mobile gaming (because, as we know, mobile gaming belongs to Rovio and its Angry Birds).
The initial question remains: how much do users really care if Facebook has its own application ecosystem? Google and Apple application store models work well and the “there’s an app for that” mentality is pervasive in the consumer mindset. Facebook would do well to focus its mobile ecosystem efforts at first on what it does well on the Web, namely social gaming and information sharing. If Facebook first plays to its strengths, the opportunities to encroach on Apple’s territory will present themselves as the ecosystem grows and Facebook learns if there is a demand for browser-based mobile applications.
Yet, the first step in the whole process has to be payments. It looks as if Facebook is about ready to take that step with Credits on mobile browsers. After that, the rest of the process will be easier to unfold.
