Why Facebook continues to focus on its Internet.org project

Puneet Sikka - Author

Aug. 18 2020, Updated 5:31 a.m. ET

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 was launched between Facebook (FB) and six mobile phone companies—Samsung (SSNLF), Ericsson (ERIC), MediaTek, Nokia (NOK), Opera Software, and Qualcomm (QCOM). Facebook’s initiative aims to meet this demand and connect everyone with each other. Internet penetration is indeed quite low in developing markets such as Africa and Asia. According to Internet Live Stats, the world’s Internet penetration increased slowly, from 29.4% in 2010 to 37.9% in 2013, and is expected to increase to 40.4% by July 2014. This means that more than half of the world’s population is still without Internet an connection.

Facebook’s making some progress on this front

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Facebook’s management explained, “We’re pretty happy with the early progress that we’ve made. We have a multi-year initiative to work with operators around the world to roll-out a program where folks can have free basic services. And as I mentioned before, a lot of the initial work is the initial partnerships were in the Philippines and Paraguay. And what we’re really pleased with, even just a few months of work, we were able to help almost three million people get access to data for the first time.”

How Facebook will benefit from this initiative

Facebook could also benefit from increased Internet penetration. Currently, Facebook has about 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. Plus, Facebook recently acquired WhatsApp for $19 billion. WhatsApp is a mobile instant messaging app that uses minimal data for messaging purposes. So WhatsApp should gain the most number of users for Facebook.

Facebook’s management commented, “Our early tests and research into new technologies such as drones and other infrastructure to connect people are promising. And over the long term we also expect WhatsApp to play an important part in connecting everyone by offering a simple, fast and reliable messaging system that could be as ubiquitous as Facebook one day. We’ll have more to share after the deal closes.”

To learn more about Facebook’s latest earnings report, see the Market Realist series Why Facebook shows strong growth but the stock is still expensive.


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