When Facebook Inc (FB) Makes An Attempt

But Home isn’t really meant for the United States. Facebook may have already hit peak penetration in the States, but it still has room to grow in countries like India where it’s used by just 10% of the population.

Developing nations are the perfect playing ground for Home – a quickly growing smartphone user base, traditional computer access is sparse, and carriers can get away with highway robbery with the fees they charge for data and SMS. Facebook Home provides free messaging and, eventually, free voice calling. By providing these free services in an elegant package, Facebook ought to increase its market share abroad.

Its real competition comes from the small social messaging apps like WhatsApp, Line, and KakaoTalk. WhatsApp, in particular, has partnered with several carriers to get its app pre-installed on their phones. As a result, WhatsApp can claim its network is bigger than Twitter’s.

Facebook will need to make similar agreements with carriers internationally, as it’s done with AT&T Inc. (NYSE:T) in the United States. Perhaps, once the company monetizes Home, it will be able to subsidize pre-installed phones or provide some monetary incentive to carriers.

Growing mobile revenue

Last year, Facebook grew mobile revenue from 0% of its total sales to 14% to 23%. With the added investment in mobile during the first half of 2013, look for that number to continue climbing.

As always, I’m sure mobile will be a big focus on the company’s upcoming earnings report (I’m writing this beforehand). Some mobile issues that investors ought to examine from the earnings report include mobile ad rates, app-install ad adoption rates, Home downloads and phone sales, and any progress in developing an Atlas suite for mobile.

The article This is What It Looks Like When Facebook Tries originally appeared on Fool.com and is written by Adam Levy.

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