Inside Facebook

Within five f___ weeks of Facebook Platform’s launch, we’ve already seen two of Facebook’s biggest competitors follow suit with plans for major new strategic initiatives to incorporate some of Platform’s most powerful ideas into their own services.

- Earlier this week, Reid Hoffman told Dan Farber that LinkedIn would be announcing platform-esque capabilities later this year:

“Over the next 9 months LinkedIn would deliver APIs for developers, ostensibly to make it more of platform like Facebook…”

- Today, Chris DeWolfe told the Financial Times that MySpace is basically going to follow suit and open up more than it ever has before:

“MySpace is likely to change its technology strategy to allow other online companies to ‘plug’ their web services directly into its social networking site…’The [Facebook] platform is interesting,’ Mr. DeWolfe said.”

With the advent of the Facebook Platform, many entrepreneurs have realized how much harder it is to convince people to build their social network on a new platform than to get them to share a new application with their network where they already are. Facebook has made that business model possible like never before. I expect the number of new “independent” social networking startups to decline dramatically in the coming months as a result.

As we witness the consolidation of social-graph building onto core networking platforms in the coming year, I expect many more big social networks to follow suit with much more open APIs. The Facebook Platform has helped those guys understand the value of building a third party application ecosystem around their “platform,” and they don’t want to miss the boat.

Technorati Tags: facebook, platform, applications, myspace, linkedin, rush

Tired of all your annoying, clutter-mongering Facebook apps? I’m not. But then again, I have style and taste and moderation in the application of applications to my profile. At least, that’s what Justin tells me when we’re doing app research.

Anyway, if you get in too deep and want to go cold app turkey, or if you’re the only urbane, sensible individual in your group of barbarian Myspace-wannabe friends, we have just the thing: the Face Off Firefox Extension, by Stuart Robertson. The extension apparently uses some CSS trickery to hide all non-Facebook app boxes on a given profile page. Importantly, it allows you to do this for anyone’s page, not just your own! Finally, you can regain the old simplicity of the pre-Platform-era Facebook (if you’re into that, you Luddite).

Of course, it doesn’t disable notifications or news feed items from these apps. That seems like a much harder problem.

Still, I think this is a great way for people who whine about the Platform to get what they want while leaving the rest of us to go crazy for apps. It seems like a perfect solution; but then again, it does take a modicum of control away from the Facebook profile and put it into the hands of the profile viewer. Will Facebook care if 3rd-party apps disappear from view like this? Probably not. But what if someone makes a Firefox extension to zap, say, ads? Or Facebook’s own widgets? I suppose there’s nothing they can do about it, is there?

Technorati Tags: facebook, firefox, apps, facebook-apps, firefox-extension, face-off

Valleywag has a letter from an anonymous Silicon Valley developer today whose startup has allocated significant resources to developing for the Facebook Platform only to find it harder than expected for their apps to spread “Top Friends”-style because of new limits being placed on app virality by Facebook.

Specifically, the developer bemoans the fact that while Facebook allowed users to invite all of their friends at once to add an application in the days following the Platform launch, Facebook has subsequently limited application-friend-inviting to 10 at a time and since again recently to 10 invitations per day.

This has indeed had significant impact on Facebook developers, including companies I’m working with. It partially impedes the most attractive aspect of building for the Platform - the chance to ride an incredible distribution model to faster success than was ever before possible (though Feed items are not impacted by these changes). The rocket ship is starting to feel more risky - while there’s a chance you could still make it into orbit, a lot more people are going to be struggling to make it out of the atmosphere.

We all realize that we have no natural right to Facebook’s users, but what we do want is an equal playing field and transparency, and a lot of us feel deceived into thinking that Facebook would continue to allow for the sort of virality they now have taken away.

It’s important to remember that Platform is still very early, very 1.0 - this is not the last time they will tweak their model, nor is it the last time that entrepreneurs should consider the risk when investing in the Platform. Facebook will always do what’s best for their users and their bottom line - and if that means capping Feed items, Invitations, or Notifications, they will. At the same time, it’s important to remember that when application developers succeed, Facebook succeeds. It’s your choice to decide how much risk you’re going to take this early in the game.

Technorati Tags: facebook, developer, application, virality

Thousands of Facebook apps have been developed so far, but only a few have skyrocketed into the user stratosphere like Free Gifts. Currently, with over 2.8 million users, Free Gifts has ascended to become the 8th most popular application on Facebook.

I spoke with Zachary Allia, developer of Free Gifts, to get his thoughts on developing a successful Facebook application. Allia, a 2007 graduate of Northeastern University in Boston, says he has received “multiple offers, jobs, and partnership requests throughout the growth of Free Gifts,” but has not yet accepted any of them, and instead is holding out in hopes of making Free Gifts profitable.

IF: What are the characteristics of Free Gifts that have made it so successful so far in your view?

ZA: I think the most important part of Free Gifts is that it attracts everyone, even the people who are anti-applications, because Facebook Gifts was there before, and now Free Gifts offers the same exact service, except it is free.

The other characteristic that I think is very important is I am very active in the user discussions on my about page. I do this for two reasons: one, because I like to hear about bugs and fix them right away, and second, because I myself am a user of Free Gifts and have opinions on how it should work. I take a ton of requests from users everyday, and I try to implement the best ones.

IF: So how did Free Gifts get started?

ZA: Free Gifts was started for fun. I knew people would like it, but I didn’t know THIS many people would like it. I did a little user survey by asking my younger sister what she hated most about Facebook, and she said “paying for gifts.” So, it all started from there, and then it grew incredibly fast.

IF: So since you’re not planning on selling out any time soon, what are your plans?

ZA: I plan on making some money with the application, but in a way that is totally non invasive to my users. I personally hate banner ads, and I don’t really want to litter my application with them. There has been a lot of thought put into how to do this, by multiple people, without being invasive. Relevant text links and limited edition sponsored gifts are going to be my first step in making this profitable.

IF: What is your advice to other application developers hoping to emulate your success?

ZA: Application developers can’t just expect to get big instantly. This is still a very new concept and some applications got lucky and took off right away, others are going to take longer to build a large user base. If a developer has an application that is fun, viral, and works it will take off eventually, but don’t frustrated if you aren’t in the Top 20 overnight. Developers know the platform is new, but users don’t really think about that and they will remove your application if it doesn’t work for an extended period of time.

Finally, I really need to send a huge thanks to 30boxes because not only do they make an amazing calendering application, but they have been an incredible help to me in the growth process. They have offered me hosting and a ton of good advice, and I don’t think Free Gifts would be nearly as successful if it weren’t for them.

Technorati Tags: facebook, app, developer, tips

It’s hard to believe it’s now been a month since the Facebook Platform was announced to much hype and fanfare. Prophecies like “Facebook is the new Internet,” “Facebook is the web OS,” and so on have been espoused from entrepreneurs and journalists alike. At the same time, the venture community has remained skeptical of the value that will be realized for Facebook Platform developers.

We’ve gathered data from all the top apps on Facebook now that we’re one month into Platform, and one thing’s clear: Facebook applications have taken off like wildfire. In fact, to the tune of 65 million net application installs over the course of the past 30 days. That’s an average of 2.5 installed applications per every registered Facebook user. And I may even be missing some.

20 applications now sport over 1 million Facebook users. 35 more have over 100,000.

It’s clear that questions of application saturation are already here. With some users adding 10-15 applications to their profile, how much attention can application developers realistically expect to attract?

I’m looking forward to how month two of Platform shakes out. Will the early streak of Facebook app acquisitions continue? Which startups will unveil new apps? Will users continue to adopt new applications at this rate? Stay tuned

Technorati Tags: facebook, platform, apps, applications, million

Music is a big, defining category for the Facebook generation, and so it’s no surprise that there are more than enough apps that allow users to show off what they’re into, and connect with others who are into the same thing. In this article, I take a look at several of the best “tracker” apps - apps that monitor your music input and update your profile with that data accordingly. This style of data collection has been around for a while, not least with sites like Last.fm, which make sense of the data and use it in interesting social ways.

Up until the advent of the app platform, however, there was no easy way for Facebook users to show these music labels outside of Facebook’s own “Favorite Music” text field.

As you’d expect, a few of these are Last.fm plugins (in fact, third-party developers beat Last.fm to the platform punch), though a few aren’t:

• Last.fm Music - This is the official Last.fm application. It is indeed a Last.fm tracker, but its primary focus seems to be on sharing content with friends. For data junkies, this app will seem cluttered with useless functionality. Requires: Last.fm account and software plugin.
• Last.fm Plus - made by Paul Wells, this is a Last.fm tracker which puts a premium on simplicity and customizability. It’s my personal favorite of the lot, and gives you full, flexible control over all of Last.fm’s data streams. There are also links to check out your friends’ tracks, and global Facebook tracks, though at the time of writing these features were down. Requires: Last.fm account and software plugin.
• Last.fm Charts - by Joe Shamah, another Last.fm tracker with a focus on the data. It seems to work fine, though with fewer customizability options, and for me the display in the profile was slightly off. Requires: Last.fm account and software plugin.
• My Last Songs Played - by MOG. Simple, bare bones tracker. Requires: MOG software.
• My Top Songs this Week - another MOG creation (why didn’t they roll both of these into one app?). Same as before, only shows top songs instead. Requires: MOG software.
• myTracker - by Keenan Gizzi. This one uses its own tracking software for WMP and iTunes (Windows-only, unfortunately) to achieve the same affect. It looks decent in the left side of the profile. Requires: Windows, its own tracker software.
• uPlayMe - this tracker is a bit more colorful, more socially-oriented app. Requires: uPlayMe account and software.
• Last.fm - Last 10 - by Hyo Byun, this one gets a mention for being the smallest-footprint app, wasting no space (not even on layout!). However, there’s an international character error right inside the screenshot, so I would recommend one of the other Last.fm apps. Requires: Last.fm account and software plugin.
• Last.fm+ - by Loren Segal. Not to be confused with Last.fm Plus, this one is another so-so contender in the Last.fm space, with yet another take on minimalist style. Some users might prefer it! Requires: Last.fm account and software plugin.

An interesting thing to note with these trackers is that they all focus on the song level, or the artist level. However, the bread-and-butter of any career musician is never the song, but rather the album. An “Album listen” is a rarer and harder thing to track, however, so it’s understandable that this stratum is missing. In that light, I wanted to mention my own app CDs, which seeks to fill this void. Its advantages over the other apps include a nice way to display album art, while its main disadvantage is obvious: some user input is required to add an album.

Well, so much for the Facebook music trackers. There’s a whole other set of music apps being developed, the purpose of which is primarily to share or host content for consumption within the Facebook profile; but those will have to wait for a later article!

Technorati Tags: music, facebook, app, lastfm, facebook-app, tracker, itunes, media

Following on the heels of last week’s acquisition of Extended Info by SideStep, I received a tip today that widget maker Slide has acquired Facebook application Favorite Peeps for a reported $60,000.

Favorite Peeps is the 14th most popular application on Facebook with approximately 1.3 million users and is growing at about 2.3% (30,000 users) per day. The reported acquisition price values each user of the Facebook app at about $0.046, or a low 4.6 cents US.

By comparison, gaming social network and utility Xfire was acquired by Viacom last year for $102 million, or about $25 US for each of its 4 million users at the time. In 2005, Fox Interactive Media acquired MySpace for $580 million, or about $36 per each of its 16 million users at the time of the acquisition. Favorite Peeps’ acquisition price pegs the value of a Facebook application user at between roughly 0.1% and 0.2% of the value of MySpace and Xfire users when those companies were acquired.

Favorite Peeps is the creation of Dennis Rakhamimov, a software engineer at Peter Thiel-funded Palantir Technologies. (Thiel is also an investor and director of Facebook. Also, Slide founder and CEO Max Levchin co-founded Paypal with Thiel and Luke Nosek.) Before joining Panantir, Rakhaminov was a software developer at Microsoft for 3 years after graduating from Columbia in 2004.

Favorite Peeps is a lot like Slide’s own Top Friends application with a tagline or comment for each “BFF” you list. You can also see what your friends have said about you. Another very simple app that got to market early and spread quickly. Not bad for a month’s work, Dennis!

Technorati Tags: facebook, apps, applications, acquisition, slide, favoritepeeps

Our Sand Hill interview series continues this week with Andrew Chen, Entrepreneur in Residence at Mohr Davidow Ventures. (Last week I spoke with Jeremy Liew, partner at Lightspeed Venture Partners, to get his perspective.)

Prior to joining MDV, Andrew was a co-founder of Revenue Science’s ad network business, where he grew the network to thousands of publishers serving 5 billion impressions per month. He led Revenue Science’s monetization efforts for social networking giant MySpace, and landed several of the company’s key brand advertising clients. Jonathan and I sat down with Andrew at the packed out Coupa Cafe in Palo Alto.

IF: You call yourself a “skeptic” on the benefits of the Facebook Platform for widget developers. Why?

AC: I think Mark Zuckerberg is very smart, but I see a lot of challenges for widget creators. The platform is a great opportunity for widget developers to put up some huge adoption numbers, but the revenue opportunity is still very much unproven.

IF: What are the drawbacks to the Facebook environment in your view from the publisher’s perspective?

AC: There are two main types of ad campaigns online: direct response advertising campaigns and brand advertising campaigns. Direct response performance depends on your ability to capture and serve purchase intent - but it’s not clear that there’s significant purchase intent most of the time on Facebook. Brand advertisers want things like immersiveness and integration. Because Facebook limits profile widget design so significantly, this will never happen on Facebook to the degree that it can on your own property. So I’m skeptical that advertising will bring significant returns for widget developers.

It’s unclear how much a Facebook app user is worth, compared to a user on your destination site. On a destination site, you can probably get a $0.50-1 CPM, whereas the CTRs and conversion rates on Facebooks apps imply a much lower CPM. Facebook app users are potentially worth about 1% of what users on your website are worth in my view, but the opportunity is to make it up in bulk.

IF: Based on your experience working with MySpace at Revenue Science, which ad campaigns do you think will be the most successful on Facebook?

AC: The best shot for monetization using ads is direct-response ads that promote mass market products. I think you have the biggest shot there to get a conversion out of users. If people are already using a particular widget for discovering cool new music, it’s easier to hook into that shopping impulse and use it for advertising. The problem is that the more mass market it is, the lower the payments typically are.

If widget makers are allowed to send traffic a ton of traffic to their own destination sites, that might work well - in that case, it’d make sense to charge the widget makers a cost-per-click for every user leaving the site, similar to the way that Google funnels people OFF the google.com search engine for a fee. That would make Facebook a true traffic acquisition engine.

IF: Would you like to comment on any other strategic challenges you see for Facebook app developers?

AC: It will be interesting to see how Facebook treats its widget ecosystem. Certainly there’ll be a honeymoon period in the set of relationships, but it’s also clear from Facebook’s perspective that they have an incentive to make sure no application is ever more popular than the Facebook platform itself. Just look at Microsoft’s long-term strategy on controlling their platform to understand how heavy-handed they’ve been, at times, to developers building on their platform.

Technorati Tags: facebook, advertising, revenue, brand, directresponse, andrewchen

It’s a good time to have a popular Facebook app.

I just spoke with Trey Philips, creator of the Extended Info Facebook application, who confirmed that travel company SideStep has acquired Extended Info and its 130,000 users for an undisclosed amount.

Philips, who just completed his third year at the University of Texas, has moved to Silicon Valley and will join SideStep and to work on Extended Info and new SideStep applications.

Extended Info received “more than a dozen” acquisition offers, “most in the same ballpark,” Philips said. “I chose SideStep because I think their current Facebook application, Trips, contributes something useful and unique to users, without being ’spammy’ – they seem focused on providing feature-rich applications, not just gaining users.”

SideStep made the acquisition to increase its reputation among Facebook users and gain expertise for developing future apps, Philips added.

Philips originally developed Extended Info in “a few hours” at last month’s F8 hackathon. Within four days, 60,000 users had signed up.

SideStep, an 80 person travel company, is also the publisher of the Trips Facebook application. Over 100,000 Facebook users have added Trips to their profile.

“A large part of the social web centers around self-expression and Extended Info allows Facebook users unlimited options for expressing themselves, said Rob Solomon, CEO of Sidestep.

“Our current app strategy is to identify concepts that are useful and map well to the travel needs of the Facebook audience. The F8 platform is pretty amazing and we want to spend the first few months experimenting to see what apps have long-term growth potential. We will continue building apps and will look to both acquire apps that map well to our strategy and hire talented app develpers to build next generation travel apps on top of the F8 platform.”

Technorati Tags: facebook, extendedinfo, acquires, sidestep, app, bought

Craig Ulliott is a web developer in Philadelphia, PA, USA. 3 weeks ago, he built the Where I’ve Been Facebook application, which lets you create a map for your profile page showing visitors where you’ve traveled. Cool experiment, right?

Well, Where I’ve Been has struck a nerve with travelers, and now has over 400,000 users on Facebook! It’s creating serious challenges for Craig: keeping the servers running is getting pricey, and he’s not making any money from his app.

He recently wrote:

Well my application has become incredibly popular, and I’m very excited about it, don’t get me wrong!

But I’m a freelance developer, not a company, and its put a powerful 4GB $450 a month dedicated server on 3 backbones at maximum load and is pushing 2000GB a month in traffic. It doesn’t make me any money and I’m getting hundreds of comments and emails daily about it.

How can i support it and maintain it? What do i do with it now? its growing at a few users a second, so should i get another server each month?

Right now, Craig’s servers are holding on for dear life and he’s put out the donation hat hoping to get some help while he figures out what he’s going to do with Where I’ve Been.

This got me thinking: why wouldn’t someone come along and scoop up a few of the most popular Facebook apps on the cheap and build a little app network? (I’ve heard that RockYou and Slide are buying up apps, can anyone confirm this?)

Getting wide distribution within Facebook is harder than most people think.

Technorati Tags: facebook, apps, applications, whereivebeen, travel, acquisitions