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Will Facebook monetize its non-core businesses anytime soon?

Part 2
Will Facebook monetize its non-core businesses anytime soon? (Part 2 of 6)

Facebook plans to offer free Internet service in other countries

The Internet.org project aims to bring affordable Internet access to everyone

The Internet.org project launched in August 2013 with a view to bring affordable Internet access to everyone around the world. This project launched between Facebook (FB) and six mobile phone companies—Samsung (SSNLF), Ericsson (ERIC), MediaTek, Nokia, now acquired by Microsoft (MSFT), Opera Software, and Qualcomm (QCOM). Facebook’s initiative aims to meet demand and connect everyone with each other.

During the company’s conference call to announce second quarter earnings, Facebook said it’s already helped 3 million people connect to the Internet in countries like the Philippines, Paraguay, and Tanzania. The company also said that it acquired Pryte in June this year. Pryte is a company with the expertise to offer affordable Internet access through partnerships with mobile operators and content providers. Facebook now expects to launch the free basic Internet service to a number of countries later this year.

Internet PenetrationEnlarge Graph

Internet penetration increasing at a slower rate

According to a report from Internet Live Stats and as the chart above shows, the world’s Internet penetration increased slowly, from 29.4% in 2010 to 37.9% in 2013. It’s estimated to increase to 40.4% by July 2014.

This means that more than half of the world’s population is still without an Internet connection. This penetration is even lower in low-income markets like Africa and Asia.

Facebook is looking to provide basic Internet service to users free of cost in order to increase Internet penetration.

Why Facebook will benefit from this initiative

In addition to these developing countries, Facebook could also benefit from increased Internet penetration.

Currently, Facebook has more than 1.3 billion monthly active users, while the world’s population is around 7 billion. So increased Internet penetration would help Facebook gain more users.

Facebook Messenger and WhatsApp, which Facebook acquired for $19 billion, could also help Facebook gain users. These services require minimal data to transmit text messages.

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