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Why the Facebook Phone Is so Good for Google

Stocks in this article: FB GOOG

NEW YORK ( TheStreet) -- Google (GOOG) has had a couple of bad days in the market recently, with the stock underperforming. One can't help but get the feeling that someone out there has been spooked by the Facebook (FB) phone announcement, and is selling Google accordingly.

The purpose of this article is to show how such an analysis is wrong. Let's game this out in a decision tree, shall we?

1. Will the Facebook phone be successful?

Before we even go into what the Facebook phone is (hardware and software, in different cases), the first fork in the road is to ask whether any version of this will be successful? Some might argue that if (almost) nobody decides to buy/use it, the Facebook phone announcement won't matter.

For starters, how do we define successful in this case? Do we base it on how many people actually buy the Facebook phone from AT&T (T)? Do we base it on how many people download the new Facebook app onto their existing Android phone? Do we base it on how much people use it, and for how long?


Let's hold those thoughts for a moment. Let's first play with the thought that "very few" people download, buy and otherwise use the Facebook phone -- hardware or software. Does this mean that we are simply in status quo, that this is neither good nor bad for any of the key players, from Facebook itself to Google and Apple?

Actually, no.

Even if the Facebook phone turns out to be much ado about nothing, something big will have happened. You see, Facebook sent a powerful message last Thursday. It said that every app developer should refocus away from Apple, and instead devote more resources to Android.

Facebook is the king of third-party developers. It rose from a Harvard dorm room a decade ago, to 1 billion users, superstardom, a near $100 billion valuation, and IPO. Every one of the million or so third-party developers -- some of them 17-year-olds working in pajamas out of their childhood basement bedroom -- listen to what Mark Zuckerberg says. His word carries weight.

Zuckerberg just told you that Apple is soooo 2011. iOS was the mobile Web's training wheels. Now mobile users are ready to drive their own car -- that would be Android -- which gives people, developers and consumers alike, the power to customize and provider richer experiences.

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