Facebook Platform: Taking Stock Of The Marriage After The Honeymoon's Over
In May of last year Facebook did, at least in my mind, one of the biggest things in web technology in a long time. They opened up their service as a platform for third party developers to build apps that today run inside of Facebook. It's seven months later and it's clear that the honeymoon is over. It probably ended with the Beacon thing although frankly that has very little to do with the platform.
Just in the past 24 hours, I've read a post about how nobody makes money on with Facebook apps and a post that says all the top apps are losing users. The blog world is not much different than traditional media. We love to build things up and then tear them down.
I think the truth is very different. Maybe videoegg's Facebook ad network isn't doing very well, but I've seen a lot of data on facebook apps in the past six months and this is what I believe is going on.
1) Facebook apps continue to grow as a percentage of overall Facebook usage, both in time spent and page views. I'd love to see a chart of this if anyone has one. Maybe the master of 500 hats has some data. If so, I'd love to see it.
2) Facebook apps are being monetized very effectively. Probably more effectively than Facebook itself. The ecpms are low, but the volume is high and money is flowing into the app developers pockets.
3) Facebook apps have high churn. Last month's hot app is nowhere to be seen this month and a new one is in its place. The apps that continue to do well month after month are few and far between and are mostly owned by real companies that can afford to continue to invest in them and grow them.
Late last year, Bebo launched its platform. It's not nearly as slick as Facebook's but there is real activity there already and it will grow. Someday myspace will launch its platform and it will be a vibrant place to make money with social apps as well.
I am glad the honeymoon's over frankly. It was a crazy time and it was hard to figure out exactly what was going on. But it was a great time to be an entrepreneur operating in a wide open market space. And we've met quite a few really interesting businesses that were built in the past six months and have invested in one so far.
I hope we'll invest in more and are working on it.