Facebook should acquire webOS from HP and use it as the launching pad for its own content services, according to Jefferies & Co. analyst Peter Misek.
HP's
(NYSE:HPQ) decision to
shutter its tablet and smartphone business and sell the
software that supported it has spawned a lot of debate in the
industry.
At least one
research firm believes HP should sell webOS to Facebook. That's right-the world's
leading social network with over 750 million users.
Jefferies
& Co analyst Peter Misek suggested that after surveying the mobile
landscape, Facebook is the best fit to buy webOS given its future ambitions to
extend its brand across media and content.
"Due to
Facebook's scale, developer community, and movement toward media (e.g., music)
and communications (Messenger), it is possible that an acquisition of an OS
asset like this could be a good option," Misek wrote in a research note
Sept. 15.
Misek, who is
not the first to suggest this move, said webOS
would be attractive to the social network for several reasons:
- Good,
sound Web assets will lead to more ad dollars, which Facebook desires to
compete with Google, Microsoft (NASDAQ:MSFT) and others for money.
Jefferies estimates online's share of U.S. ad spend to increase from 15
percent in 2010 to 20 percent in 2015.
- Rivals
Apple (NASDAQ:AAPL), Google (NASDAQ:GOOG) and Amazon (NASDAQ:AMZN) are
competing to build cloud services, including music, books and video.
Facebook could use webOS, which plays well with the cloud, as a singular,
integrated platform to promote its network.
- Apple
will launch an Internet-based television next year, opening the door to a
new ecosystem of selling subscription services, ad revenues and
Web-enabled TVs. This is something Google has failed to do with Google TV.
- Finally,
Misek believes carriers and OEMs want a third viable smartphone ecosystem,
particularly with uncertainty swirling around Android's patent-litigation
problems. While Misek noted, Microsoft Windows Phone 7 is the
front-runner, Microsoft's mobile strategy has been poorly executed thus
far.
"An acquisition of WebOS could allow another player to
take advantage of any stumbles," Misek wrote, adding that inquiries
revealed developers would support a potential Facebook OS.
There are some
problems with Misek's theory. While Facebook is certainly interested in bulking
up its media, communications and ad assets, history shows the company has
stopped short of buying access to such content.
Facebook
integrates heavily with INQ Mobile, HTC and others on so-called "Facebook
phones," and it has an even deeper integration with Skype for voice over IP
calling capabilities and social connections between both platforms.
Save for some
piece acquistions, Facebook prefers to build its software in-house. The company
has stopped short of building out its own OS to date and has never shown an
interest in acquiring such an expansive piece part and putting it in front of
consumers.
Then again, a
bow-tied, proven OS, such as webOS, offers the company some interesting
possibilities. With webOS, Facebook could partner with HTC and others to build
real Facebook phones and even tablets.
Why not? The
company certainly has the consumer cachet and brand HP lacks, and could prove a
formidable challenge to Apple's iPhone and iPad, and Android handsets and
tablets.
If Facebook
does make a play for webOS and gets it, Misek said this scenario would be most
problematic for Research in Motion (NASDAQ:RIMM) and Microsoft Windows 8
because it would mean there would be another strong player competing for the
third mobile OS horse behind Apple iOS and Google's Android.
Misek expects
Facebook's purchase of webOS would have minimal impact on Apple and Google.
"Over
time, Android share gains could decelerate (currently 48 percent) due to a new
ecosystem that exhibits less vertical integration aspiration, but we believe
Android will remain the share leader due to OEM/developer stickiness and
Google's continued innovation," Misek said.
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