Facebook CEO Mark Zuckerberg launches Internet.org

Facebook CEO Mark Zuckerberg launches Internet.org

Facebook CEO Mark Zuckerberg, who is on a two-day visit to New Delhi, launched the global Internet project called internet.org in the country. The project, which was globally announced in August last year, aims to bring Internet connectivity to the two-thirds of the global population that is not connected. The founding members of internet.org are Facebook, Ericsson, MediaTek, Nokia, Opera, Qualcomm and Samsung.
“These founding companies have a long history of working closely with mobile operators and expect them to play leading roles within the initiative, which over time will also include NGOs, academics and experts as well,” according to a statement by Facebook earlier in August 2013.
Appreciating India's Mars mission Mangalyaan, Zuckerberg said, “After this achievement, it is now important for the country to connect all of its people to the Internet. With Internet.org we aim to connect rural India to Internet. In India, about 243 million people are connected to the Internet and 100 million of that uses Facebook. However, there are more than a billion people in the country who are still not connected. We want to change that with this project.”

Unilever and Internet.org partner on internet study for communities across India

   

Today, Unilever announced a partnership with Internet.org, a Facebook-led alliance of partners, to understand better how internet access can be increased to reach millions more people across rural India.

Just 13 per cent of the Indian population has internet access and as an initial step, Internet.org and Unilever will carry out a comprehensive study to examine the opportunities to increase internet adoption in rural communities. Apart from infrastructure and cost which are known barriers to connectivity, the partnership will carefully evaluate other educational and cultural factors that also limit internet use.
The mission of Internet.org is to bring the benefits of internet access to all and by leveraging Unilever’s vast expertise on the ground via a comprehensive research and activation programme, the partnership aims to better understand the barriers to connectivity in rural communities. Unilever and Internet.org will leverage this research to inform the development of a series of on-the-ground projects with the aim of improving lives in rural India through better connectivity.
Unilever has extensive experience developing and deploying programmes for rural consumers. For example, Lifebuoy, the world’s leading health soap, has been promoting handwashing awareness in rural India for several years and has successfully enabled women in remote communities to enhance their incomes through the Shakti(Link opens in a new window) ( 531KB ) project.
Lowering the barriers to internet access requires a collaborative effort. Through this partnership, Unilever and Internet.org are pursuing the mission of bringing the benefits of internet access to the two-thirds of the world who are not yet connected.
Keith Weed, Chief Marketing and Communications Officer, Unilever:
"Access to the internet is improving in countries like India but there is still a very high proportion of people that would love the opportunity to connect and engage but who cannot enjoy what many of us take for granted. Having no internet access naturally removes all associated opportunities that it brings which, in turn, can be a barrier to learning and ultimately hinder economic development. Through our long history of serving the Indian market we bring an in-depth understanding of rural Indian communities. We hope, together with Internet.org, we can use this know-how to understand better how a vital modern resource can benefit many more millions."
Chris Weasler, Director of Global Connectivity, Facebook:
"The internet not only connects us to our friends, families and communities, but it’s also the foundation of the global knowledge economy and a way to deliver basic financial services, health and educational tools. In partnership with Unilever, we hope to break down the barriers to access and, in turn, provide millions of people with the information that can help them, and their communities, thrive."

About Internet.org:

Internet.org is a global partnership between technology leaders, nonprofits, local communities and experts who are working together to bring the internet to the two thirds of the world’s population not yet connected. Founding members include Ericsson, Facebook, MediaTek, Nokia, Opera, Samsung and Qualcomm.

What Mark Zuckerberg didn’t say about Internet.org

When Facebook Founder and CEO Mark Zuckerberg meets the Indian Prime Minister Narendra Modi later today, he’s likely to make a strong pitch for Internet for all, via Facebook backed Internet.org. Internet.org fits in well with the NDA governments “Digital India” mandate: Digital India is about making the Internet available to the masses, while with Internet.org, Zuckerberg made the pitch yesterday for making the Internet free for the masses. Sounds like a perfect fit, but it hardly is. What PM Modi and his advisors must take heed of, is that what Zuckerberg means by Internet for all, is essentially Facebook for all, along with a few non-profit services thrown in to give it the appearance of philanthropy, and maybe a few co-opted competitors to make it appear as if it isn’t about Facebook only.

Where Internet.org doesn’t fit with the Modi governments mandate is that it essentially hinders the “Make in India” campaign. At a ridiculously carefully controlled press interaction in Delhi yesterday (the journalists asking the questions appeared to pre-selected, despite being told earlier that questions we submitted would be randomly selected), Zuckerberg didn’t talk about:


- Before a telecom operator gets a roster of services to choose from, how would core services be selected for the Internet.org app?

- Under what circumstances are services going to be rejected for Internet.org?

- Who exactly pays telecom operators for free Internet access and how are the rates paid to telcos decided?

- Are the rates that telecom operators being paid for consumer access to Internet.org going to be higher or lower than market rates, and will there be public disclosures, so these can be compared with pay-per-use access rates in each country?


- Why is Facebook (via Internet.org) distorting the market by splitting the Internet into services that are free and paid for consumer access?

Our question for Zuckerberg (which didn’t get answered) – “Doesn’t creating a consumer data pricing differentiation between those companies which are on board at internet.org and those which are not, disadvantage those startups who can’t afford to pay telecom operators for subsidising data?”

It’s like the Mobile VAS situation all over again: a few companies will have access to the customer through this free service – and in India, the gap between free and paid is a massive one – and those who are on board will benefit, while competing services  wont. Essentially:

- If Gaana.com is available on Internet.org, what will Saavn do?
- If 99Acres* is on Internet.org, what will Commonfloor do?
- If Alibaba is on Internet.org, what will Indiamart do?
- If TimesofIndia is on Internet.org, what will OneIndia do?
- If YouTube is on Internet.org, what will Vuclip do?
- If MakeMyTrip is on Internet.org, what will Yatra do?
- If Paytm is on Internet.org, what will Freecharge do?
- If Facebook owned Whatsapp is on Internet.org, what will Hike do?
Our guess is that they would be forced to enter special revenue sharing arrangements with telecom operators, for data bundling.

The nexus between Facebook and Telecom Operators

 


Internet.org allows Facebook to increase its dominance and get new users hooked on to the service. It allows telecom operators to do exactly what they’re lobbying for in India – create a revenue share arrangement between Internet companies and telecom operators. Airtel, an Internet.org/Facebook partner in Zambia, has repeatedly been saying that it should be getting “interconnection charges” for data services from Internet companies. Uninor wants “Data VAS”. For more on those lobbying efforts,

In fact, Facebook has actually joined the COAI, the telco association that is lobbying for this arrangement: Facebook is helping create a “Data VAS” situation with Internet.org, where some services (with non profit services thrown in to make it look good) will be available for free, and the rest are paid. Telecom operators are happy because free services get consumed more, and they make more money. Do you think access to the free web (outside of Internet.org) will be cheaper? If telcos make Rs 500 per customer per month via Internet.org, will they charge Rs 150 per month for access to the free web? Or will they increase those rates in order to make customers switch to Internet.org, where they make more money?
Think of the startups, their access to customers and potential future competition for Facebook. If ISP’s didn’t allow open access to social networks, and Orkut was willing to pay for preferential pricing, would Facebook have dominated the social networking space in India?

What Zuckerberg did say

In between what were mostly safe questions (including “why free Internet, why not water?”, “what would you do now if you started up again?”), a reporter from the Washington Post slipped in a second question (only one question per selected person was allowed, and only those who had submitted questions earlier were allowed to ask) about this walled garden approach, and it potentially creating monopolies:

“The way that this works is”, Zuckerberg said, “we’re trying to pioneer this model where the operator can offer free basic services to help people understand why the Internet is valuable for them. Offer a some basic things for free, that are going to be valuable to the society, ultimately with the goal of helping people learn more about what they can do on the Internet. They ultimately can buy data plans to fund the development of the Internet. Ultimately it is up to the operators to choose which services they want to include. Right, so I think it is going to vary from country to country, in terms of which companies people want to include, which non-profit services, social issues are more important that the government wants to fund app development for to include in these packages. And there’s no rule that says that Facebook or any other company has to be included in this. It’s just proving that this is a model that works to get more people on the Internet and to make it so that operators can also increase their profitability so that they can invest more to build more infrastructure so that they can serve more people. I’m optimistic that getting more people on the Internet will help Facebook over the long term too, but there’s definitely no rule that says that Facebook has to be included in each country as a service. If you take a country like China where Facebook is blocked, I can guarantee you that if the model ends of being successful, we are obviously not going to be offered there, and that’s fine because if more people get on the Internet and there are different services there, that’s still good for the world.”

Indian companies might create apps as per the ‘Make in India’ philosophy, but the lack of a neutral Internet access ecosystem, and the existence of a walled garden like Internet.org, is going to hinder competition. The access, development and social services angle is just sugarcoating.
Internet.org makes business sense for Facebook, but not for India.

WhatsApp, Internet.org aimed at long-term growth, not short-term gain


 

Arguing for long-term growth over short-term gain, Facebook CEO Mark Zuckerberg said Monday that his company's $19 billion deal to buy messaging service WhatsApp fits into a larger goal of connecting more people around the world to the Internet.
WhatsApp may ultimately be worth more than the eye-popping price Facebook agreed to pay last week, based on the revenue that other messaging services are earning, Zuckerberg insisted during a talk at the Mobile World Congress in Barcelona, Spain.
But he added that the acquisition means WhatsApp co-founder Jan Koum can concentrate on expanding the service's international user base -- now about 450 million and growing fast -- rather than worry about how to make money from the operation.
Facebook's CEO also announced several new initiatives by an industry alliance called Internet.org, which he formed last year to work on improving Internet access in underserved regions. A new study commissioned by Facebook found that expanding Internet access in developing countries would increase economic productivity and create millions of new jobs.
In one initiative, Facebook is working with Nokia, Airtel and the Rwandan government to help students get online educational materials by using low-cost smartphones. In a separate effort, Zuckerberg said he's looking for telecommunications partners to help deliver a free or very-low-cost mobile service that includes a stripped-down version of Facebook along with weather forecasts, crop reports or other useful information for residents of rural or undeveloped regions.
The idea is to provide basic service comparable to free 911-calling ability, Zuckerberg said. But one analyst said communications firms may not see much benefit to an idea that appears "Facebook-centric."
"Whether (telecommunications) operators will buy into Facebook's vision remains to be seen," analyst Eden Zoller of the Ovum research firm said in an emailed comment. "The direct monetization prospects for telcos are thin."
Zuckerberg downplayed any near-term benefit for Facebook, saying there is little advertising business in undeveloped regions.
"I think we're probably going to lose money on this for quite a while," he said of Internet.org, but "over time, if we can deliver this, there probably will be some benefit for Facebook" and other companies.

Zuckerberg also said the WhatsApp deal grew out of conversations he and Koum had about providing better Internet service in undeveloped parts of the world. He added that "Jan was excited" about Internet.org and its goals.
Facebook is paying $16 billion in cash and stock for WhatsApp, plus $3 billion in restricted stock for WhatsApp founders and employees who remain over several years. Zuckerberg pledged Monday not to interfere with Koum's stand against utilizing WhatsApp user data for advertising, although that's a key part of Facebook's business model.
Investors seem to like Zuckerberg's thinking: Facebook's stock hit a record high Monday and closed at $70.78, up more than 3 percent for the day.
But when asked if he plans another bid for Snapchat, a rival messaging service that turned down his reported $3 billion offer last year, Zuckerberg said: "After buying a company for $16 billion, you're probably done for a while."