Wednesday, December 25, 2013

T-Mobile's Deal With Facebook Is an Important Test

In Facebook's second-quarter conference call, Mark Zuckerberg outlined three main goals for the company going forward. The first was to connect everyone. Google (NASDAQ: GOOG  ) shares this goal with Facebook, and the advertising rivals might end up helping each other.
With a growing number of users accessing Facebook through mobile devices, the company wants to ensure that anyone can access its services. In February, Facebook announced partnerships with 18 carriers in 14 different countries to allow subscribers free or discounted access to Facebook.
The best part about these deals for Facebook is that it isn't footing the bill for data usage.It has helped out with marketing and promotion, but considering its access to one of the largest advertising platforms is all but free, that isn't too much of a burden for the company.
Although the terms of the arrangement with GoSmart were not disclosed, it's likely Facebook has come to similar terms. Considering Facebook's saturation level in the U.S. and the average price per ad in the country, T-Mobile is getting just as good of a deal as Facebook.
Google, on the other hand, is unlikely to make similar deals with carriers. The company's service, by its very nature, sends people to other parts of the web. Instead, Google has taken to setting up free WiFi networks all over the world, including plans for a potential network of balloons or blimps over Sub-Saharan Africa and Southeast Asia, which could connect an additional 1 billion people.
Google can benefit from Facebook's deals with carriers, however, as more people sign up for data plans once they get a taste of the mobile web. This is what T-Mobile and GoSmart are banking on.

source: www.fool.com

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