Facebook just plunked down a reported $100 million to $200 million to buy a company that trims smartphone bills. And there's a good reason for that: The social network needs new users, and those users are increasingly cash strapped.
At a time when new U.S. users are drying up and saturation in other developed markets is on the horizon, Facebook is increasingly prioritizing emerging markets to fuel growth. It's a tricky gambit, given the paucity of online and commercial infrastructure in such markets, and one that could take years to pay off. But Facebook could reap the spoils of being a pioneer, among the first to tackle a challenge that other large internet companies, Twitter foremost among them, will soon be grappling with themselves.
Israel-based Onavo said it is being acquired by Facebook, giving Facebook a suite of apps for reducing mobile data usage via compression (not to mention its first Israeli satellite office, in Tel Aviv). Trimming smartphone bills is particularly important for users in developing countries, and Onavo is Facebook's second big play for such users in as many months, the other being its Internet.org initiative to wire the developing world.
"We hope to play a critical role in reaching one of Internet.org's most significant goals using data more efficiently so that more people around the world can connect and share," Onavo CEO Guy Rosen says in a blog post.
Facebook Buys Israeli Maker of Data Compression Software for Mobile Web Effort (New York Times (blog))
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