Much has, and should be, written about FaceBook. To me, FB is triggering a new stage in the “elevation of distribution”. If you’ve followed FB at all, you’ve seen how most credit their move to opening their platform as the stroke of genius.
With it’s platform strategy, FB has created a virtual mosh-pit of developer activity…
“Dave Morin, Facebook’s director of platform, told the Developer Meetup audience via videoconference that more than 40,000 developers have requested to be part of the project, around 1,500 applications have been produced so far, and some of the most popular went from zero to 850,000 users in three days.” CNet June 15th News.com article
I’d observe that the legions of “personal start-ups” (web 2.0 mash-up teams) have become anxious as their web 2.0 start-ups evaporate amongst the noise, not gaining any meaningful consumer traction. It feels like this creative geek clique has been waiting for the next thing to drive their TechCrunch fantasies forward. Along saunters FaceBook, and the hills are alive again! [UPDATED]
Don’t get me wrong, valley skepticism (realism?) is only a small part of my personality; I do really gets the fundamental importance of this trend. However, it’s worth thinking a bit about the impact on ad model and consumer adoption models.
adsense > appsense?
While FaceBook apps kind of feels like strawberry fields, we all know those don’t last forever. How FB applications achieve consumer visibility is at the core of FB’s revenue model (and nose bleed valuations). We all know there are thousands of apps under development, way too many of which are being stupidly rushed to market (come on people, could someone hire a QA person?). The next assumptive step is to charge for distribution. A ’sub-ecosystem” is already forming around this even before the distribution model has been formalized.
The evolution of this model will be really important to watch.
There has been some exposure of the FaceBook rate card, and reporting of relatively low leverage ad performance on the network. While some might this as a trigger to discuss the limited fundamental value of the business, I think this is missing the point. Facebook is not about the single click value of an ad. It ain’t adsense, and never should be - let’s contrast adsense and what fb should become…
Adsense is a brilliant machine, designed to optimize and extract the “transactional lead value” out of every consumer search.
FB app distribution should become a brilliant machine, designed to optimize and extract the “viral network value” out of every social connection they facilitate.
Transactional revenue model - meet your match - it’s the viral network marketplace model. If FB evolves to create the “must be in” marketplace for viral distribution of consumer applications, it will become a really, really important company. There is a reason this business is fundamentally important to Microsoft and Yahoo - it’s creating a serious infrastructure play in the middle of their core business.
artificial dissemination?
A part of me shudders at the chilling wind of change to the deep non-commercial viral and community roots of the Internet. FB aims to organize natural user-driven behavior that has been happily morphing and reforming itself into a commercial marketplace.
Sadly brilliant, and no slam dunk - this organic body may yet reject these artificial parts.
UPDATE: Ethan Stock did a nice job adding some value to this post, it’s worth a read on Onotech Blog. He expands on the app distribution value of FB into content distribution. Hmm, I need to noodle on that dimension. I hadn’t been thinking of FB that way, but it’s probably spot-on…
