Facebook mobile developers

Parse ToolsFacebook has just acquired Parse, marking its entry into a whole new business category: paid tools and services for developing mobile apps.

The company is buying the mobile-backend-as-a-service startup (yes, the industry acronym is mBaaS) in a deal that we’ve heard is worth $85 million. [Update: And we're hearing that excludes retention.] Neither company is commenting on the size of the deal, except that Facebook said it’s not “material.” For more on the long-term impact of Parse on Facebook’s business, read our follow up, “Parse Isn’t An OS, But It Is Facebook’s Answer To Android And iOS“.

Parse was founded about two years ago by a small group of seasoned Googlers and Y Combinator alums who got together to build a useful set of back-end tools for mobile developers. They originally called their back-end service, the “Heroku” of mobile in a homage to what was one of YC’s biggest exits to date — the 2 million sale of Heroku to Salesforce.com.Parse Developers They offer services that help mobile developers store data in the cloud, manage identity log-ins, handle push notifications and run custom code in the cloud.

Facebook won the deal amid what we’ve heard was a competitive process with many of other Valley’s other biggest potential buyers. Parse CEO and co-founder Ilya Sukhar said that he chose Facebook over other suitors — without naming names — because the company was a better cultural fit.

“I don’t think any of the other conversations created anywhere near the excitement level that we had for Facebook, ” he said in an interview.

Why Parse? Facebook is in a big push to become more relevant than ever to mobile developers. It doesn’t own its own mobile OS like Apple or Google. It doesn’t make its own devices.

Instead, it’s a horizontal social and identity layer that runs through thousands of apps of iOS and Android, in deep custom integrations in devices made by hardware makers like HTC, and in its latest project, Facebook Home.

In that sense, Facebook has to prove value to mobile developers in other ways. Facebook integrations can make apps stickier when users add friends, and the company’s mobile app install ads help developers acquire new users.

Now through the Parse deal, the company will be able to offer back-end services for data storage, notifications and user management. This is a brand new kind of revenue stream for Facebook, as the company is keeping Parse’s freemium revenue model. Parse currently has over 60, 000 apps and roughly the same number of developers. They focus on monetizing the top 10 percent of their clientele.

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