Facebook's Big Vulnerability with Home: Trust

Rick Newman
Senior Columnist

It's terrific news that Facebook didn't actually introduce a phone of its own. Yet another new phone would be an old story at this point.

Instead, the social-media site's big mobile play is its new Home software, set to roll out on Android devices over the next several months. Home is a kind of uber-app that would dominate most of the other apps on your smartphone. It would essentially become the home screen on your phone, and serve as a filter through which you'd access other apps. Android's own operating software would be relegated to background status.

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It's an ingenious idea, and you've got to credit Facebook CEO Mark Zuckerberg with this: Instead of choosing whether to go big or go home, he did both. Home relieves Facebook of the need to come very late to market with a device that would be far outside its realm of expertise, while also providing something unique in the crowded market for apps.

But it seems to have one huge vulnerability: It will require a much larger degree of trust among smartphone users than any other app developer, or perhaps even smartphone manufacturer, has banked on up till now.

Since Home would dominate the whole experience with your phone, it would have to be something you'd feel thoroughly comfortable using. As everybody knows by now, smartphones are no longer mere appliances serving a pure, utilitarian function. They're extensions of ourselves. They contain secrets. They connect us to our 1,700 closest friends. They stream Justin Bieber's every utterance.

Some people undoubtedly will trust Facebook to curate their smartphone experience, most of them probably under 25. Facebook has of course had a few problems with privacy issues and allegations that it exploits its members' personal data for marketing or other commercial purposes. Some people don't care. Others aren't even aware it could happen.

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But for a lot of people, the beauty of smartphones is that no single company dominates the experience of using one. Even Apple, the last big practitioner of the old walled-garden mentality, allows hundreds of thousands of third-party apps on the iPhone. Same with Android phones. That allows users to diversify, entrusting bits of their information to dozens of different apps.

People continually try out new apps and delete old ones, rarely becoming dependent upon any given one. That's why using a phone is so much more enjoyable than administering it, which usually requires signing a long-term contract that locks you into service from a company you probably don't like very much. In fact, complaints about one-stop mobile service providers often top the list of things consumers dislike the most.

With Home, Facebook wants you to consolidate your information and your experience within one app. This comes as smartphones are evolving into a digital wallet where you'll store all the financial information you need to shop, bank and perhaps even manage your investment accounts. Will users end up trusting Facebook with that kind of info more than American Express, Amazon or Fidelity? And will they think nothing of going through Facebook to conduct transactions significantly more important than posting an update?

They might.

In the latest survey of corporate reputations by Harris Interactive, Facebook ranked 43rd, which was far behind leaders such as Amazon and Apple, yet ahead of banks such as Wells Fargo, J.P. Morgan Chase and Citigroup. Yet Facebook's reputation also fell 12 spots from where it ranked in 2011, and its overall score dropped from the "good" range to "fair."

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My guess is that Home won't catch on, because Facebook's ambition doesn't match what it actually offers. At least not yet. Facebook remains a hugely popular social-media service, but that's just one thing people do with their phones, and socializing on phones is already a pretty rich experience. As for games, maps, recipes, finance, shopping, research, productivity and everything else people use their phones for, why would they consider Facebook the optimal manager of those resources? Just because it wants to be?

The web doesn't work like that, and Facebook has a lot to prove before it convinces smartphone users to trust it with their entire mobile experience. But it deserves credit for trying something new, and it's still a pretty fun place to check out what your friends are up to.

Rick Newman's latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.