To understand why Facebook (FB – Get Report) is reportedly paying up to $1 billion to buy brain-interface startup CTRL-Labs, it’s probably worth looking at Mark Zuckerberg’s misgivings about how the smartphone world evolved.
For all of the enormous mobile successes of its main platforms, Zuckerberg has more than once voiced his disappointment with how Apple (AAPL – Get Report) and Alphabet/Google (GOOGL – Get Report) control the world’s dominant mobile operating systems, and (with the help of the app stores launched for their respective platforms) act as de facto mobile gatekeepers. Facebook has made some attempts over the years to wrest a measure of control from Apple and Google, but the efforts have generally fallen flat.
In the early part of the decade, Facebook bet heavily on making the HTML5 software stack the foundation of its iOS and Android apps, as well as its mobile website. By doing so, the company both wanted to make it easier to roll out software updates across platforms and make it less important to consumers whether they used an app or a mobile browser to access Facebook. But the company was forced to backtrack and focus on developing “native” iOS and Android apps after complaints mounted about the user experience delivered by the HTML5 apps.
Likewise, Facebook Home, a custom Android interface that launched in 2013 and integrated Facebook’s content and services in a number of ways, also saw a less-than-enthusiastic consumer response. The HTC First, an Android phone that came with Facebook Home pre-installed, wound up flopping (if there were any plans for an HTC Second, they were scuttled).
With Facebook currently on a $70 billion-plus annual revenue run rate and getting over 90% of its revenue from mobile ads, the failures of efforts such as Facebook Home and its HTML5 apps were far from disastrous for the company. But Apple and Google’s mobile OS dominance can still cause some headaches for it.
For proof, one only has to look at recent earnings call remarks from CFO Dave Wehner about how efforts by mobile platforms to restrict data-collection are (by impacting Facebook’s ad-targeting abilities) expected to contribute to a revenue growth slowdown. Or for that matter, how Apple’s refusal to allow third-party SMS apps on iOS has prevented Facebook from integrating SMS within its iOS Messenger app the way it has in its Android app. In addition, Apple and Google have occasionally launched mobile apps and services that are bundled with their platforms and compete against Facebook (think Apple’s iMessage or Google Hangouts).
Facebook’s mobile ups and downs appear to have been on Zuckerberg’s mind when he agreed to spend $3 billion in 2014 to buy VR headset developer Oculus VR. When talking about Oculus’ strategic importance to Facebook, Zuckerberg has frequently argued that VR and AR headsets will serve as major computing platforms over the long run, and will enable a number of immersive social experiences along the way. He has also suggested that over the long run, Facebook cares less about selling headsets than about providing the underlying software platform — tightly integrated with Facebook’s apps and services, of course — for them.
Along similar lines, the company’s purchase of CTRL-Labs is a bet on controlling a next-gen computing interface that might one day be frequently used to engage with social media services. CTRL-Labs has been developing an armband that can that aims to let users control devices via nothing but electrical signals sent from neurons in one’s spinal cord.
“[Imagine] you’re playing a video game and you want to push a button to hop like you’re playing Sonic the Hedgehog. I can train you in seconds to turn on a single neuron in your spinal cord to control that little thing,” claimed CTRL-Labs CEO Thomas Reardon in a 2018 interview. Reardon, whose startup has hired a number of machine learning experts, also floated the idea of using neurons to not simply replicate human hand motions, but to “control 30 virtual fingers without actually moving your hand at all.”
In a short post confirming the CTRL-Labs acquisition, Facebook exec Andrew Bosworth highlighted the potential social media uses of the startup’s technology. “It captures your intention so you can share a photo with a friend using an imperceptible movement or just by, well, intending to,” he said, while also suggesting Facebook will want to integrate the technology with VR and AR platforms.
Needless to say, this is all very experimental, early-stage stuff. There’s no guarantee that it will be commercialized on a large scale — and if it is, it’s not guaranteed that Facebook will be the one to do it, given that others are also interested in this space. But as is the case with VR and AR, which are also (relatively speaking) in their infancy and have drawn major investments from other tech giants, there’s a major payoff in the event that a Facebook-developed platform does see large-scale success.
And Facebook, which has a $500 billion-market cap and generated over $22 billion in net income, certainly has the resources to make a bet or two on experimental, next-gen, computing platforms.