Why Would Facebook Want to Buy BlackBerry?

A blog about business and economics.
Oct. 30 2013 12:51 PM

Facebook + BlackBerry = Technological Quagmire

169973295
BlackBerry's market share in the U.S. dropped to a paltry 4.3 percent in July.

Photo by Justin Sullivan/Getty Images

Matthew Yglesias is on vacation.

The Wall Street Journal is reporting that BlackBerry executives met with Facebook to discuss potential bids for the ailing smartphone-maker. Strategically speaking, such a deal would give Facebook the ability to circumvent other manufacturers they rely on. The companies aren’t talking to the public, so whether a Facebook phone would use its own operating system, BlackBerry’s, or just base it off Android is unclear. The deal could be a significant market shakeup—in theory.

But why would Facebook want such a deal? Blackberry’s slide from grace has been going on for years, but September was a particularly bad month. The company announced it would lay off about 40 percent of its workforce, that it had lost $1 billion in the last quarter, and that it was backing off the consumer market to focus on businesses. Echoing this, T-Mobile stores have since stopped carrying BlackBerry smartphones.

Advertisement

The market is pretty duopolistic, at least for now, and there’s not much reason for that to change in the short run. Windows Phone is fighting for third place in Europe—according to Engadget, it’s celebrating 10.8 percent market share in France and 12 percent in Britain. BlackBerry’s presence in Europe, meanwhile, shrank to a diminutive 2.4 percent in the five major European markets. BlackBerry’s market share in America fell to 4.3 percent in July.

Even were BlackBerry a good buy, it wouldn’t be a good fit for Facebook. Just over a year ago, Mark Zuckerberg said a Facebook phone "has always been the wrong strategy for us." Even if Zuckerberg has changed his mind about a Facebook phone, BlackBerry seems like the antithesis of what it would be looking for, especially with the company’s recent pivot back into its business-focused niche. Have you ever wanted to provide all of your employees with a phone centered on social networking?

Facebook would need to roll back a number of very recent BlackBerry decisions the moment it stepped through the door. Facebook also has significant work left to do with the existing markets: One recent study found that Facebook’s mobile ads have a vastly higher ROI on iOS than on Android.

All of this aside, BlackBerry is still a valuable company. The Wall Street Journal notes a number of assets owned by BlackBerry, including $2.6 billion in cash, no debt, and patents worth between $1 billion and $3 billion. And I’m also guessing Facebook will take note of another bit of BlackBerry news breaking today: BlackBerry’s messaging app picked up 20 million users across Android and iOS since its launch a week ago.

Still, BlackBerry as we’ve come to know it would be a quagmire for Facebook.

TODAY IN SLATE

Politics

Don’t Worry, Obama Isn’t Sending U.S. Troops to Fight ISIS

But the next president might. 

The Extraordinary Amicus Brief That Attempts to Explain the Wu-Tang Clan to the Supreme Court Justices

Amazon Is Officially a Gadget Company. Here Are Its Six New Devices.

The Human Need to Find Connections in Everything

It’s the source of creativity and delusions. It can harm us more than it helps us.

How Much Should You Loathe NFL Commissioner Roger Goodell?

Here are the facts.

Altered State

The Plight of the Pre-Legalization Marijuana Offender

What should happen to weed users and dealers busted before the stuff was legal?

Surprise! The Women Hired to Fix the NFL Think the NFL Is Just Great.

You Shouldn’t Spank Anyone but Your Consensual Sex Partner

Moneybox
Sept. 17 2014 5:10 PM The Most Awkward Scenario in Which a Man Can Hold a Door for a Woman
  News & Politics
Altered State
Sept. 17 2014 11:51 PM The Plight of the Pre-Legalization Marijuana Offender What should happen to weed users and dealers busted before the stuff was legal?
  Business
Business Insider
Sept. 17 2014 1:36 PM Nate Silver Versus Princeton Professor: Who Has the Right Models?
  Life
Outward
Sept. 17 2014 6:53 PM LGBTQ Luminaries Honored With MacArthur “Genius” Fellowships
  Double X
The XX Factor
Sept. 17 2014 6:14 PM Today in Gender Gaps: Biking
  Slate Plus
Slate Fare
Sept. 17 2014 9:37 AM Is Slate Too Liberal?  A members-only open thread.
  Arts
Brow Beat
Sept. 17 2014 8:25 PM A New Song and Music Video From Angel Olsen, Indie’s Next Big Thing
  Technology
Future Tense
Sept. 17 2014 9:00 PM Amazon Is Now a Gadget Company
  Health & Science
Medical Examiner
Sept. 17 2014 11:48 PM Spanking Is Great for Sex Which is why it’s grotesque for parenting.
  Sports
Sports Nut
Sept. 17 2014 3:51 PM NFL Jerk Watch: Roger Goodell How much should you loathe the pro football commissioner?