With today's launch of the Facebook (NASDAQ:FB) Home for Android, which skins Android into a social-centric OS, some are saying that Facebook is stabbing Google (NASDAQ:GOOG) in ways similar to what Amazon.com (NASDAQ:AMZN) previously did with its Kindle Fire. I don't agree.
Why Facebook's move is much more benign at this point
What Facebook did was not an entire OS. It's more of a substitute for Android's launcher, but most importantly, this launcher keeps all of Google's services, such as Google Play, Google Maps, Gmail and others intact. This means that Google keeps its Android monetization efforts intact in a phone that ships, or converts to, Facebook Home.
Such was not the case with Amazon.com's effort. What Amazon.com did was a true fork of the Android OS. It was, for most purposes, a new OS which Google did not control. And in this OS, all traces of Google were wiped clean. Google Play was substituted for Amazon.com's App Store. Maps were gone, Gmail was but an e-mail configuration in Amazon.com's e-mail app. What this meant is that in an Amazon.com device, most of Google's efforts towards monetization were destroyed or substituted for services intended to be monetized by Amazon. All the while, Google kept the cost of developing the OS further (so that Amazon.com could fork it again).
In short, Amazon.com's move was aggressive towards Google. The objective was not to work with Google and divide the spoils, the objective was to remove Google altogether. Not so with Facebook. At this point, Facebook Home presents a symbiotic relationship with Google. It keeps Google's monetization efforts intact while presenting a further reason to opt for Android - at least while Facebook Home is available just on Android.
We've seen several moves from Google which seem designed to counter-attack Amazon.com's initiative, such as:
- A price war on cloud services;
- The launching of the Nexus 7, a direct competitor to the Kindle fire at the very same price;
- Exploratory inroads into e-commerce, which the pilot Google Shopping Express, delivery lockers, etc.
At this point, while Google competes with Facebook through its Google+ social service, I wouldn't expect any retaliatory move specifically designed to counter Facebook Home. Of course, Google might seek to integrate Google+ a bit better with Android, but it's likely that such won't be done to the detriment of Facebook.
On Facebook's side, the major risk that it might present for Google is if it designs its software in such a way as for it to run apps (outside the Google Play purview). But even then, Android is already open to third party stores, so such wouldn't be much of a competitive escalation. Even Facebook's social search seems unlikely to ruffle Google's feathers, as it's more of a gimmick, quite contrary to the threat Amazon.com presents when it positions itself as some kind of product-search catalog where people can start their searches (as opposed to doing them in Google's own search engine).
The nature of Facebook Home is much different from what Amazon.com did with Android. It's not a fork of the OS and it keeps Google's monetization intact. As such, Facebook is not stabbing Google. Not in the way Amazon.com is.
Disclosure: I am short AMZN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.