The future of Facebook may not say 'Facebook'

Published Thu, Apr 17 2014 6:02 PM EDT

The New York Times

Farhad Manjoo

In the two years since its rocky initial public offering, Facebook has become a strong business that regularly releases financial results that set investors' hearts aflutter. Despite every hipster prediction otherwise, the company's user base keeps growing, and nearly a fifth of the time that Americans spend on their smartphones is spent on Facebook. That surpasses the amount of time we spend on any other single service by a wide margin—and beats just about anything else we do on our phones, or perhaps in our lives, period.

Andrew Harrer | Bloomberg | Getty Images

And yet, when was the last time you swooned over some new feature in Facebook? The two big products that Facebook unveiled last year—Home, an Android lock screen, and Graph Search, a search engine—failed to catch on. And some of the most innovative recent social networking ideas have come from upstarts, which Facebook has either spent huge sums buying (up to $19 billion for WhatsApp, $1 billion for Instagram) or trying and failing to buy ($3 billion offered for Snapchat).

Every time a new, much-hyped Facebook product blows up on the launchpad, and every time the company pays billions for someone else's greatest idea, predictions of Facebook's doom begin to roll in. But Mark Zuckerberg, the company's co-founder and chief executive, is not worried. Facebook's innovation engine may have stalled lately, but Mr. Zuckerberg has been working on revamping the way the company creates and distributes new services. The effort, which he began discussing this year, is called Creative Labs, and can be summarized in a single word: apps. Lots and lots of apps.

"What we're doing with Creative Labs is basically unbundling the big blue app," Mr. Zuckerberg said in a recent interview at the firm's headquarters in Menlo Park, Calif.

In the past, he said, Facebook was one big thing, a website or mobile app that let you indulge all of your online social needs. Now, on mobile phones especially, Facebook will begin to splinter into many smaller, more narrowly focused services, some of which won't even carry Facebook's branding, and may not require a Facebook account to use.

The plan is as risky as it is bold, and it will greatly alter how most of Facebook's billion-plus users experience the service. It could easily backfire by annoying users and perhaps slowing growth. And despite earning rapturous reviews, the first app out of Creative Labs—Paper, an iPhone app that lets users navigate Facebook's News Feed through a system of touch gestures—has gained few users since it was unveiled in January.

Mr. Zuckerberg's plan isn't really a surprise. Facebook has long been offering its services in separate apps; it introduced a stand-alone text-message app, Messenger, in 2011. The new plan will accelerate that effort. To use all of Facebook's features, you may need to install a bunch of different apps that will each prioritize a single function, from browsing the News Feed to sending messages to interacting with groups.

Last week, the company began notifying users that it would soon require that they install the stand-alone Messenger app to send Facebook messages.

Mr. Zuckerberg said the multi-app strategy is meant to adapt Facebook to the way people use mobile phones, which now account for the bulk of Facebook's visits and advertising revenue. "In mobile, there's a big premium on creating single-purpose, first-class experiences," he said.

Because there is so little space on a phone's screen, apps that promote a single function can have a simpler and more intuitive design, improving the way they work. Single-purpose apps may run more quickly, too. For example, Facebook has found that people get messaging replies 20 percent faster through Messenger than through the Facebook app.

But what's most promising about the multi-app strategy is that it lets Facebook take creative risks. "You'll see us exploring new areas that we felt we didn't have the room to do before," Mr. Zuckerberg said.

For software companies, one of the perils of success is becoming shackled to your customers; the more users you have, the harder it is to innovate, because most will be averse to any change. (Microsoft has suffered a version of this.) By filtering its innovations into new apps that lack an established user base, engineers and designers can take creative leaps that may not have worked if they'd simply been adding features to Facebook's primary app.

You can see this thinking at work in Paper. Developers on the project said they they'd been given the freedom to try out new kinds of programming tools and to indulge novel design ideas; they described it as an effort to mimic the ethos of a start-up within Facebook. The result is powerful: Paper looks and feels like no other Facebook app, and it is a pleasure to use—one of the most arresting mobile products that any company, large or small, has put out recently.

Still, Creative Labs has its critics, and its success is far from guaranteed. Ted Zoller, the director of the Center for Entrepreneurial Studies at the Kenan-Flagler Business School at the University of North Carolina, argues that such a system is doomed because of the lure of start-up money. "If you're a talented engineer and have a good idea at Facebook, why would you create it while you're at Facebook and make Mark Zuckerberg richer?" he asked.

What's more, by creating new features outside of its main app, Facebook could be limiting its ability to promote its innovations to its core users. Still, though Paper has been languishing on the app charts, Mr. Zuckerberg said he wasn't concerned, and was prepared to wait for Paper and other Creative Labs projects to slowly gain an audience.

There's a logic to this view. "You often see that isolating innovative teams from some of the commercial demands of a company—giving them a quarantined, protected status—is one of the better ways to promote innovation," said Andrew Razeghi, founder of the consulting group StrategyLab.

But whether Facebook will manage to eventually turn upstart apps like Paper into something big remains to be seen.

The Creative Labs strategy fits with Mr. Zuckerberg's view that some parts of the mobile Internet are much bigger and more complicated than he had previously thought. He noted that WhatsApp and Facebook's Messenger were nominally identical—both are used to send texts—but that after studying both products' huge user bases, Facebook found they were being used by different people for different purposes. "I think we basically saw that the messaging space is bigger than we'd initially realized," he said.

This idea explains Facebook's increasing appetite for acquisitions. On a huge mobile web, services like WhatsApp and Instagram can benefit from Facebook's resources while maintaining their own communities and, crucially, not cannibalizing Facebook's own user base.

It also explains Facebook's willingness to be looser with its own branding. "We went out of our way to just call it Paper, not Facebook Paper," Mr. Zuckerberg said of the new app. "One of the things that we're trying to do with Creative Labs and all our experiences is explore things that aren't all tied to Facebook identity."

If the new plan succeeds, then, one day large swaths of Facebook may not look like Facebook—and may not even bear the name Facebook. It will be everywhere, but you may not know it.

—By Farhad Manjoo for The New York Times

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