I know, I know. It's a semicrazy idea, but before you get all bent out of shape, consider this: Facebook's two biggest challenges are monetizing its 955 million users and figuring out its mobile ad strategy.
What's more, its current model is proving to be insufficient to compel investors to believe there is value in social media.Although the company continues to show decent growth in terms of monthly active users as well as better-than-expected revenue, it seems that investors are unable to stomach what appears to be slowing revenue growth. The term valuation is starting to matter to Facebook. The stock's recent decline is telling investors what the Facebook story has become: It needs to save some face! The way it can do that is by making a bold enough move to tell Wall Street that it is serious about meeting its challenges head on. The company recently hinted about making a phone of its own. But it knows nothing about hardware. Acquiring RIM would put it right in the middle of the heated battle that includes Amazon (AMZN), Microsoft (MSFT) and especially Google (GOOG). It's tough to consider this as merely an "option" at the moment. I tend to think that this is a move that Facebook has to do to prevent Google from eating its lunch. Its business and sustainability is now heavily predicated on its ability to perfect mobile ad revenue. In RIM, not only will Facebook get a better enterprise presence, it will acquire assets such as RIM's BB10 software, a growing music service, and RIM's Mobile Fusion, a product that supports the collaboration of enterprise mobile devices, even that of competing models such as iPhones and, yes, even Android devices. In essence, Facebook instantaneously becomes a hardware and services company. What would Facebook's relationship with Apple mean should it make a move like this? For that matter, how will it impact its relationship with Microsoft? I would think that Apple would love nothing more than to help strengthen Facebook if it means knocking off their mutual adversary, Google. RIM is the perfect pawn to play what has become the tech chess game. For Facebook, buying RIM would start a new chapter in what has been (to this point) a very disappointing narrative. Follow @rsaintvilus At the time of publication, the author was long AAPL and held no position in any of the stocks mentioned. This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV