Reports of cooperation between the world's largest social network and Israeli companies Spacecom Satellite Communications Ltd. (TASE:SCC) and Israel Aerospace Industries Ltd. (IAI) (TASE: ARSP.B1), which are jointly building the Amos 6 satellite, have been featured in the media over the past 24 hours. The big question, however, is what exactly Facebook is looking for in space and in Africa, which Amos 6 is slated to fly above.
In a post by Facebook CEO Mark Zuckerberg on his Facebook page, he talks about his wish to connect the sub-Saharan Africa to the Internet. This is a large-scale project headed by Zuckerberg and Facebook, called internet.org, designed to help those living in remote areas to connect to the Internet.
What has Facebook have to do with Africa? Like any business seeking to reach as many customers as possible, Facebook, too, wants to grow. If you take the number of Facebook's monthly active users, the social network is already larger than every country in the world. As of June 2015, 1.49 billion people entered Facebook - far more than the 1.36 billion population of China (as of 2013), the world's most populous country. For Facebook, however, that is of course not enough.
Zuckerberg is looking ahead at the potential, and at Facebook's vision - to connect all the people in the world with each other. There are 7.3 billion people in the world, so Zuckerberg has a long way to go, because "only" a fifth of them are connected to his social network. So he is reaching out to users by acquiring popular applications like Instagram and WhatsApp, but that is not enough.
The vision and desire are coming together under the hot sun of Central and Southern Africa. For Facebook, sub-Saharan Africa is like an uncut diamond. The task of cutting it is divided into two parts, and Israel is playing a major role in both of them on the way to the next billion users for the world's biggest social network.
The first, and ostensibly easier, part is to bring the Internet to places where it supposedly already exists. In more than a few sub-Saharan African countries, the Internet exists, but the problem is the price and the lack of understanding for the need. In this case, Facebook is acting through its development center in Tel Aviv to cut costs through cooperation with local operators, and by offering basic Internet services. These range from services like Wikipedia, Facebook, and Messenger to medical information. The rationale is that as soon as people are exposed to the Internet's uniqueness, they will be willing to pay for it.
The second, more difficult, step is to bring to the Internet itself to countries that are simply cut off from it. Amos 6 is designed to do precisely that by providing broadband services directly from outer space to the residents' cell phones. Once the Internet lands and prepares the spadework for the basic Internet services that Facebook is offering through internet.org, the social network will in time be able to build an audience of potential users. This is one of the ways that Facebook is trying to bring Internet to remote locations, in tandem with its efforts to do it with drones, while a company like Google is trying to use blimps for the purpose.
Will Facebook succeed in its task, and will it soon have a billion more users? It will not happen in a month or two, and probably not in a year or two, either. What is involved is a huge investment designed to bear fruit only after quite a few years. Even then, it is by no means sure that people in Africa whose choose to be exposed to the most basic Internet will want to be part of Zuckerberg's network, even if he is the one to introduce the Internet to them.
Still, for Zuckerberg and Facebook, the risk and the investment are worth the effort at this stage. Otherwise, the social network's potential growth will at some point reach a glass ceiling, where it is liable to stop dead in its tracks.
Published by Globes [online], Israel business news - www.globes-online.com - on October 6, 2015
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