Facebook developers are facing challenging times, that’s the least we can say after summarizing ‘The Facebook Platform: Finding Success in the Facebook Economy” workshop at Web 2.0 Expo.
Not only do developers not agree about the total potential revenues to be made of Facebook applications in 2008 (ranging from 10 to 100 million $), moreover questions were raised about Facebook’s’ approach to limit viral distribution channels for low engagement apps like ‘Funwall’.
The question here is of course if Facebook is protecting users from applications who send invitations all day rather then boycotting developers. Facebook has not been ignoring growing complaints about hundreds of useless invitations a day in one’s account, and now offers the possibility to block applications, therefore limiting distribution opportunities for developers. One thing is sure: a shift towards high involvement applications might proof unavoidable to keep users hooked.
Facebooks’ CPM rates are historically low and currently only average about 15 cents. Despite this, developers see a future in useful and engaging applications with a solid user base and more opportunities to directly monetize. Other revenue sources as selling goods or services have also been discussed, but 80% of the platform’s revenues still derives solely from advertising.
The shift towards high involvement applications casts doubt over the smaller independent companies who usually specialize in low involvement applications. On the other hand Naval Ravikant from Venturehacks discouraged multi-million dollar investments in Facebook developer companies, stressing the difficulties to monetize and maintain a long term loyal user base. In other words: smaller initiatives of developers should be encouraged by Facebook. Becasue, ‘If Facebook can improve the quality of its applications by encouraging developers it can probably only get better of it’, reasons Ravikant.
Facebook was also asked to be more transparent and fair in their policy as developers believe there is still plenty of room to cheat.