I was pleased to read on Techcrunch yesterday a report on the the Web 2.0 Expo entitled Facebook Platform Faces Rough Road Ahead, Despite Successes – it is good to see some reality kicking in.
It seems the conference is concerned about the fading performance of early star Facebook apps (e.g. Zombies) and by the way that Facebook is cutting back on application spam:
The panelists also agreed that Facebook’s recent moves to block viral distribution channels have made life harder for the developers of low engagement apps such as Slide’s FunWall. These apps suffer most because they depend on Facebook’s viral channels for their adoption, having given users little reason to invite their friends proactively.
Rather than being concerned, I see this as a positive development. As any user of FB will know invite spam was ruining the experience and low engagement apps are by definition not that interesting. In a sense all Facebook is doing is demanding higher quality apps from developers, which is obviously a plus for the overall health of the platform.
The panel also made this point, although in a slightly different way:
In the long run, more engaging apps such as Scrabulous are set to do better not only because they attract more dedicated users, but because they rovide better opportunities for direct monetization, even if their CPMs are also quite low. Ravikant made a point to say that travel, dating, book, and game-related apps have the brightest futures whereas “everyone else is kinda screwed”.
I think what we are witnessing here is Facebook growing up. The future of Facebook apps, and probably the company itself depends on our collective ability to produce the kind of high engagement apps that will keep us all coming back for more. The bumps in the road are a by-product of FB’s recognition of this point. The flip side of encouraging high engagement apps is penalising low engagement apps.
This analysis applies equally to all other horizontally focused socnets – and, as I’ve said before, I think this is why they are all embracing open strategies.
One other piece of (potentially) interesting information in the Techcrunch post is predictions of revenues to Facebook app developers this year. They ranged from $10-100m+ – i.e. not much (particularly in light of Slide’s $500m valutioan). Further, as RealityCrunch points out “when people are trying to convince you there is money being made, run the other way”. Note though, that these predictions are focused on low engagement apps as the higher engagement apps are still new to the scene.