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Facebook cozies up to mobile app developers with Parse acquisition

Facebook?s acquisition of Parse, which automates certain parts of app development, reinforces the social network?s commitment to mobile by bringing it closer to developers and opening up new opportunities to build mobile ad inventory.

Facebook reportedly acquired Parse for $85 million, beating out other suitors such as DropBox, Yahoo and Google. The company has been working with some big brands, including Cadillac, RetailMeNot and Emporio Armani, providing back-end services for their mobile apps.

?This is a fairly significant deal because it is a new stream of the business,? said Arun Ramdeane, senior account executive at Atimi Software, Vancouver, Canada. ?This isn't an area where Facebook has an existing presence, so it is going to create new relationships for them in areas that did not exist and hopefully add new revenue streams to the organization.

?It may open new doors into Facebook for developers and advertisers to increase their audience,? he said. ?Facebook is a big enough engine with the potential to create great ecosystems for advertisers to leverage.

?If their end goal is a mobile operating system, these smaller pieces they are putting together will hopefully drive enough value to developers, that when the day happens, they jump on board.?

Compelling apps
Creating compelling apps can require a lot of resources which is why backend-as-a-service companies such as Parse, StackMob, Kinvey and others exist.

Parse makes it easier for developers to connect mobile apps to the cloud and provide automatic functions such as data storage and connections to social networks. As a result, developers are able to focus on creating features that will provide a strong user experience.

The two-year-old company works with 60,000 developers and has a tiered-pricing strategy including a free plan for smaller apps and more robust plans that start at $199 per month as traffic increases.

In a case study published on its site, Parse showcases work done with creative development agency Sequence on an app for The Food Network called On the Road.

The app enables users to share photos taken at a restaurant, review meals and figure out how close they are to the more than 3,000 restaurants featured on The Food Network?s shows.

Working with Parse enabled Sequence to save developer time, not have to worry about server management and include features such as photo sharing.

Getting cozy with developers
Since Facebook does not offer a mobile operating system, the deal brings the social network closer to mobile app developers and makes it easier for them to create apps leveraging Facebook?s features.

?What this does for Facebook is continue to drive the barrier down, not so much on the high end side of application development but the small to mid-tier products with what would hopefully be greater access to Facebook's features,? said Scott Michaels, a partner at Atimi Software.

?What this purchase does, is give them more horsepower to the API side of the business, which adds stability to all the developers out there using Facebook as the platform of choice for deployment,? he said.

New mobile ad inventory
Ostensibly, mobile app developers will be able to build more, better and faster Facebook-enabled products. At the same time, Facebook is able to keep the entire app usage in its cloud so as to make sure that all of the data generated by the app adds to the value of Facebook?s social graph, per Brennan Hayden, executive vice president and chief operating officer at WDA, East Lansing, MI .

One key implication of the deal is the ability for Facebook to create new mobile advertising inventory and thereby increase its share in the quickly growing mobile ad space.

?Apps are an great way to manufacture advertising inventory, kind of the way a blog does for online,? Mr. Hayden said.

?If Parse enables Facebook to control the advertising inventory within the apps that are enabled, and the uptake is high among developers, Facebook extends their share of growth in digital advertising by creating new inventory,? he said.

?Considering their already enormous share of Web views, it remains a question how much higher they can go there, so apps provide them a potentially bright new source of inventory growth.?

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York