Absorb or be Absorbed

Back in December, Uber and Facebook announced a partnership which would allow users of both services to hail an Uber car from within Facebook Messenger. This deal was emblematic of a pair of strategic imperatives that’s becoming increasingly clear and, in this case at least, were highly complementary. The two strategic imperatives are these:

  • If you aspire to capture user attention, you must absorb as many other activities as possible into your domain
  • If you aspire to provide a single great piece of functionality, you have to make sure it’s as broadly available as possible within the various domains where users spend their time.

Absorb

Facebook is very much a company in that first category and, as I’ve written about before, it’s why Facebook is building what looks increasingly like a sort of Meta OS, a layer on top of true mobile operating systems subsuming more and more of their functionality. Instant Articles, Facebook Video, Messenger, the recently added M assistant, and so on are all examples of Facebook taking content or activities that have historically resided outside of Facebook and bringing them into the domain it controls and monetizes. As it brings more of these activities into its sphere of influence, Facebook keeps users within its walls and, while there, can continue to serve them ads. Even when it can’t keep them within Facebook-branded properties like the Facebook and Messenger apps, it can capture their attention in Instagram, WhatsApp, or Oculus virtual reality experiences.

Or be absorbed

For Uber, the challenge is it provides a single piece of functionality, which has historically resided in its own app. But users have no reason to open that app unless they’re ready to hail an Uber car, even though activities users perform in other apps might well serve as precursors to hailing a car. As such, its strategic imperative is to place functionality into as many other domains as possible, including the Facebook Messenger app. Since that time, it’s been working on a broader implementation of this strategy and earlier this month, it announced Uber Trip Experiences. It uses the Uber APIs to allow developers to create functionality within their apps that integrates with Uber in some way. Some examples are music apps that create playlists just long enough to keep you entertained during your ride, news updates to occupy you during the trip to your next meeting, recommendations for places to eat when you arrive at your destination, and automatically turning on your thermostat when you’re heading home. Uber’s functionality is fairly compelling as a standalone service and app but, if it’s to be truly useful to users, it needs to be absorbed and integrated into a myriad of other experiences on users’ smartphones.

Complementarity and competition

In the case of Facebook and Uber, these strategic imperatives came together in a wonderfully complementary way – Uber wants to be everywhere, and Facebook wants to absorb everything, so the two came together. Where the two imperatives become complicated is when companies that have been complementary in the past start to compete, especially if they both aspire to absorb rather than be absorbed. Facebook has benefited enormously from the rise of Android and iOS and their respective app stores and user bases. But it now aspires to absorb many of the activities those operating systems or other app vendors on those platforms have historically considered their domains and the owners of those operating systems are starting to fight back.

Apple has created its own music service to keep users in its domain when they’re listening to music, rather than entering a domain controlled by Spotify or Google. It’s also created a News app to capture user attention that might also go to Facebook and its increasing investment in iMessage is arguably a counterstrike to Facebook’s investment in Messenger. Apple’s efforts with Siri and Spotlight over recent years have been a reaction to Google’s dominance of search and a desire to avoid Google’s absorption of more user time on Apple devices. Meanwhile, Google is itself building a layer on top of its operating system which can keep users in the Google domain even while in other apps, in the form of Google Now on Tap. As Google, Apple, and Facebook’s absorption aspirations grow, they will increasingly find themselves competitors where they had been complements. The cracks in their various relationships will eventually begin to show.

Absorbers will become increasingly powerful

Those companies that seek to be absorbers rather than the absorbed will, in turn, gain increasing power over single-function applications, which will need to play by their rules in order to enter their domains. App developers are already accustomed to the vagaries of Apple and Google when it comes to playing in their app stores, but Facebook as an absorber is quite a different animal, and one they’ll have to learn to reckon with and work with. These absorbers will also therefore exert increasing power over their users, who will have to go through increasingly controlled and managed elements of their respective platforms to get to the content they want. This, in turn, will raise questions about the motivations of these absorbers and whether their incentives are aligned with those of their users.

Published by

Jan Dawson

Jan Dawson is Founder and Chief Analyst at Jackdaw Research, a technology research and consulting firm focused on consumer technology. During his sixteen years as a technology analyst, Jan has covered everything from DSL to LTE, and from policy and regulation to smartphones and tablets. As such, he brings a unique perspective to the consumer technology space, pulling together insights on communications and content services, device hardware and software, and online services to provide big-picture market analysis and strategic advice to his clients. Jan has worked with many of the world’s largest operators, device and infrastructure vendors, online service providers and others to shape their strategies and help them understand the market. Prior to founding Jackdaw, Jan worked at Ovum for a number of years, most recently as Chief Telecoms Analyst, responsible for Ovum’s telecoms research agenda globally.

225 thoughts on “Absorb or be Absorbed”

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    suppose you wrote a catchier title? I mean, I don’t want to
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    added something that makes people desire more? I mean Absorb or be Absorbed – Tech.pinions is a little
    vanilla. You might look at Yahoo’s front page and see
    how they write news titles to get people to click.
    You might add a related video or a picture or two
    to grab readers interested about everything’ve written. In my opinion, it could bring your blog a little bit more interesting.

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