> 2. They haven't found a way to make advertising work on mobile, an increasing part of their visits.
And herein is the problem: Apple - Apple is so against advertising that they created their own iAd network to keep other companies out of the game (it doesn't have to really be a success - just enough to keep devs off competing ad networks).
As long as Apple is influential in the mobile world, Google and Facebook are going to have a tough time with mobile ads... do consumers actually want ads? Apple is betting no, and as far as they're concerned - screw the devs and advertisers.
Android is a more popular mobile OS than iOS by far and in fact googles reason for approaching it that way is that they want a platform to serve ads on.
But so far they havne't managed to find a way to do it.
I think monetization would require near-monopoly-level control for Google. How much would adwords bring in if Google weren't the "default search" destination?
If Google can basically kick Apple back into niche status (not there yet), then they could extract monopoly rents on a defacto standard of ad-based apps either using Google's mobile ad network, or a consortium of which they are the sole influential player.
Perhaps that explains why they haven't tried to heavily monetize this yet - that would pus more consumers into non-ad-based apps where Apple is strongest.
This is also because the business model of apple vs FB|GOOG is completely opposite. People pay apple for their products. People expect everything from Google and FB to be free.
People are paying apple for their products and do not want to pay to have that product riddled with spam.
Frankly, FB has to figure out how to make a search service, via fb.com and their mobile apps.
An interesting twist could be to allow users to search for things that other users are doing or planning to do. e.g. "who is interested in going to the movies tonight?" and let a group organize around that activity - then sell them discounted movie tickets.
And herein is the problem: Apple - Apple is so against advertising that they created their own iAd network to keep other companies out of the game (it doesn't have to really be a success - just enough to keep devs off competing ad networks).
As long as Apple is influential in the mobile world, Google and Facebook are going to have a tough time with mobile ads... do consumers actually want ads? Apple is betting no, and as far as they're concerned - screw the devs and advertisers.