Inside Facebook

When it comes to major web companies experimenting with promoting their web services via Facebook applications, the road has proven challenging: while many applications by independent developers have achieved sustainable engagement on a large scale, many applications produced by large internet companies haven’t.

For example, let’s look at Amazon which, like eBay, Yahoo, Google, Digg, and others, has allocated some time and resources to trying some things on Facebook. A few months ago, Amazon released two applications:

• Amazon Giver, which syndicates your Amazon Wish Lists and lets you browse your friends’
• Amazon Grapevine, which syndicates your Amazon activity stream on your profile

The results? Each app has about 10 daily active users and appears to be on the shelf.

But Amazon is not deterred. The company just released its third Facebook application this week:

• UnSpun by Amazon, which allows users to create lists of recommended items and vote on friends’ suggestions

Is the third time a charm for Amazon on Facebook? As of today, the app has about 70 daily active users.

Others have seen similar results on Facebook. For example:

• Digg – about 30 DAU
• Yahoo Finance – about 20 DAU
• Google News – about 30 DAU
• eBay Marketplace – about 350 DAU

The road from web app to Facebook app glory is clearly not paved with simply putting an Invite tab on your service or porting a social feature.

So what are web service providers supposed to make of the Facebook Platform? Are Facebook apps ultimately just glorified ad units – good for exposing some content and driving some traffic back to the destination for deep engagement or commerce? Or will web service providers ultimately be able create innovative, large scale consumer services inside Facebook?

I believe a few category winners will create deep products that leverage the social graph to create new value. Whether the battles will be won by industry behemoths or new developers remains to be seen.

What do you think?