How Facebook Knows What’s Hot Before You Do

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Facebook knows what’s hot in mobile perhaps before any other company. And the person Big Blue Social has to thank for it is you.

If data is the new oil, Onavo is a big fat pump in a Texas field, pulling black gold out of the matrix. Facebook acquired the Israeli company in late 2013, and the public statements about Onavo’s place in the Facebook ecosystem were all about using data more efficiently so more people can connect and share.

And, a Facebook representative added, “their analytic tools will help us provide better, more efficient mobile products.”

Indeed.

Onavo’s technology is a VPN, a virtual private network. A VPN helps you browse and surf privately, by protecting your location, internet address, and other data from the services you connect to on the web and via mobile apps. That’s often a good thing, and Onavo added something even better: by compressing data and making it even more efficient to send and receive, Onavo reduces your data bill.

That’s a nice-to-have in the U.S, but it’s essential in many developing economies where connectivity is slow and mobile data is expensive.

Those benefits, of course, are the bait.

The hook is that Onavo knows what its users do, where they go, and what they access. And, since Facebook owns the app, Facebook knows.

You might wonder why Facebook needs that data. After all, with literally billions of users, sure Facebook has enough data to know precisely what’s hot and what’s not?

In a sense yes, but in another sense, no.

We live in a mobile world today, and almost all innovation in media and technology is happening at end points that touch people (phones, vehicles, electronics, homes) and connection points that aggregate data and extract knowledge (the cloud). The most powerful and popular end point today is — you guessed it — the smartphone.

Just by opening an app or browsing the web, we all generate a sea of data daily.

When those actions happen outside of Facebook, Facebook is often blind to those activities. That means it could be blind to the innovation happening at the key end point that, to continue to grow into the world’s largest people connector, Facebook must dominate. The problem with dominating the smartphone is that although Facebook’s apps are massively popular, the only two mobile platforms on the planet that matter are owned by frenemies. Or, coopetitors.

I’m talking, of course, about Google and Apple.

New competition for Facebook is most likely to arise on the smartphone, but Facebook doesn’t own the smartphone, and therefore has limited visibility into what might be growing, silently in the dim mists of Google Play’s back rooms, or building a base for rapid future expansion quietly in the App Store’s lesser-visited hallways.

Facebook could, of course, buy multiple licenses from mobile analytics firms like App Annie, and it probably does.

But there’s nothing like owning your own private porthole into the emerging winners of the space that could eventually threaten your dominance.

So, as the Wall Street Journal revealed today, Facebook built an early warning service to notify them when apps were picking up traction and getting hot, especially in the social space, which it currently owns … and wants to continue owning.

Onavo, which funnels data from perhaps 30 million users globally, provides the canary in the coal mine.

And, it’s worth knowing, this is one reason why the App Store and Google Play have a proliferation of flashlight, utility, data compression, and VPN tools. Many of them ask for permissions to see what is happening on your mobile device, and then sell the data.

If you’re not paying for the product, after all, you are the product.

The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.

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