Inside Facebook

Facebook has made a great effort this year to increase its level of international outreach, and Turkey has taken note.  Especially lately.

During the first of of the year, national penetration was lingering at about 4.5% with about 3 million of Turkey’s 71 million people signed up for and actively using Facbeook.  During Q3 and Q4 of this year, however, Facebook exploded, adding 4.5 million more people to its Turkish audience.  As of today, the total number of Turkish users on Facebook is about 10.6% of the entire population, or approximately 7.5 million people.

With these numbers, Turkey has launched into the top five most represented countries on Facebook.  It is surpassed by the U.S. (41 millions users), United Kingdom (14.8 million users), and Canada (10.7 million users). Behind Turkey is France with close to 6.3 million users.

Facebook competes in Turkey with four other social networks: OrtaKantin.com, StudentSN.com, Unihayat.com, and YouniTR, making its popularity even more notable.

With the growth in audience size in Turkey, the Facebook Platform’s spread has also followed.  There are now 760 Turkish apps available in the applications directory.  The top ten most popular apps list includes a video sharing app (think Turkish YouTube meets Facebook), a Sim City-esque game called “My City” and an app called Online People that facilitates new connections between Turkish-speaking strangers on Facebook.

If you’re a developer or marketer interested in building, buying, or selling a Turkish Facebook app, you’ll find that the application marketplace for such apps is very active on the developer’s forum, with one user, “tolgafiratoglu” leading most of the Turkish app threads on the discussion boards.

The social networking scene in Turkey seems to be in flux with an increased level of engagement on both Facebook and the Facebook Platform.  We’re not only looking forward to seeing Facebook’s growth in Turkey in 2009, but also where all of these trends will lead.

Facebook application acquisitions are a lot like domain name sales: out of every 10 that happen in any given week, only 1 gets publicly announced. While only a few Facebook application sales have been publicly reported (Inside Facebook has broken the news on the following sales: Pieces of Flair and Speed Racing to RockYou for a rumored seven figures each, Free Gifts, Esgut, and Nicknames to SGN, Favorite Peeps to Slide, and Extended Info to Sidestep), there’s actually a fairly active market for applications going on behind the scenes.

The biggest challenge developers face in selling their applications is the supply glut: there are simply many more applications (over 25,000 are listed in the directory) than interested buyers. So, how can developers sell off their applications? Here are 8 tips for beating the market and successfully completing a sale:

1. Build a Sustainable Viral Loop/Game Mechanic. Because they’re so rare, developers who invent apps which naturally sustain their growth through compelling viral loops or game mechanics are very valuable in the eyes of acquirers or investors. If your app achieves large scale daily active use, you should be able to get a good valuation in current market conditions. For example, Pieces of Flair and Speed Racing were recently acquired by RockYou, and the developers of the game Friends For Sale successfully raised $4 million for a chunk of their company.

2. Prove a Revenue Model, No Matter How Small. If your application makes money, even a couple dollars a day, you’ve got a valuable asset on your hands. First, consider ways of templating your application so you can make more money. If you’re ready to sell it off, the Developers Forum or eBay are good places to list. Acquirers should pay a reasonable multiple of your annualized revenue - somewhere between 5-7x.

3. Clone Existing Applications. If you’re short on ideas, look at what other people are doing that’s working and do your best to emulate them. Chances are that where there is one buyer, there are others. Requests for clone apps are common in the Developers Forum (see examples here or here). Try to pick one that’s not yet a commodity.

4. Build To Order. Speaking of the Developers Forum, many buyers will post requests for applications they’re looking to acquire. Watch requests closely, and jump on opportunities when they come up. If you’re quick, you might be able to build a nice little arbitrage business.

5. Build Using Standard Technologies. Before an interested buyer will sign on the dotted line, they’re going to want to do due diligence and take a look at your code. If your app is written in PASCAL, you’re going to have a hard time convincing the buyer that they’re going to be able to use what you’ve created. Stick to PHP and MySQL and you’ll be fine.

6. Be a Rockstar Developer. If you’re running 200,000 DAU off a memcached 486 in your closet, chances are top Facebook app companies want to talk to you. Let me know if you need an introduction

7. Get a Large Number of Users. Let’s face it: at the end of the day, it’s a lot more expensive to get 1 million users to add your app today than it was a year ago. If your app has achieved wide distribution, there are buyers lurking in the Developers Forum waiting to talk to you (see example here).

8. Offer Maintenance for a Limited Time. For potential buyers of your app, one of the scariest scenarios they can think of is your server crashing the day after they write the check. Promise to stay on board and ensure a smooth transition for your app to its new home for 30, 60, or 90 days, and you’ll make your potential buyers much more comfortable spilling the ink.

BONUS TIP: Don’t Listen to “Agents.” If somebody approaches you and offers to help you sell your app for a “portion of the sale price,” run for the hills. ESPECIALLY if this is the first time you’re doing a sale. There are a lot of sharks out there that talk a smooth game but ultimately don’t have your best interests in mind. They probably don’t know any more than you do, and at worst, they may try to totally screw you over. Unfortunately, it happens more often than you think.

Update: TripAdvisor’s Brian Payea has responded: “This is untrue. Beyond that, we do not have any comment.” Payea would not specifically comment on whether acquisition hasn’t happened or simply that the reported price was inaccurate. Take it for what you will…but for now, though this is not a ridiculous price given the canvas page views and CPMs I would expect Where I’ve Been to be generating, it seems like the first big Facebook app acquisition is still yet to happen.

Just two months after asking, “I Have 250,000 Users, Now What?”, Craig Ulliott has an answer.

In what is by far the largest Facebook application acquisition to date, travel company TripAdvisor has reportedly acquired Where I’ve Been from Craig Ulliott for $3 million.

The acquisition marks the first major successful exit of a Facebook application since the Platform launched just under three months ago.

With 2.3 million users, Where I’ve Been established itself as by far the biggest travel application on Facebook, leading #2 Cities I’ve Visited (also TripAdvisor owned) by over 1 million users.

The $3 million price tag values Where I’ve Been users at about $1.30, or almost 30 times the 4.6 cents per user Slide paid for Favorite Peeps two months ago.

If confirmed, this acquisition marks a major step toward validating the value rapidly being created by Facebook platform developers. Many have questioned the liquidity of the Facebook application market beyond the $60k range that Slide paid to acquire Favorite Peeps.

“This means Facebook is a real platform,” said Naval Ravikant, founder of Hitforge, an investor in the Facebook platform.

“I do think he sold too early, but $3M is a great return for the amount of time he invested.”

Certainly! For a developer once unable to afford a server to handle his bustling app traffic, a $3M sale is sure to inspire additional development and investment in the Platform. Congratulations to Craig for hanging on and leading Where I’ve Been to a successful exit!

Technorati Tags: facebook, app, acquisition, whereivebeen, tripadvisor

I am excited to announce that InsideFacebook will now be accepting FREE listings for Facebook applications for sale by developers!

With Facebook application acquisitions already happening at a rapid pace (many more have not been announced), my intention with this service is to enable a broader marketplace that will help the hundreds (now thousands) of Facebook application developers gain access to a larger community of investors and entrepreneurs, and help investors gain access to a larger group of developers and opportunities.

By listing their applications for sale using the instructions on our Sell Your App page, developers will be able to solicit offers from interested parties, as long as your application is listed in the complete list of all Facebook applications.

To list your application for sale on InsideFacebook FREE, email sales at insidefacebook dot com or send me a Facebook message and include the following information about your application:

• Name and URL of application
• Name and contact information of developer
• Description of application
• Description of technology used
• Number of users
• Historical data on user growth and usage statistics (optional)
• Reserve price and “buy it now” price (optional)

We will respond to all listing requests as soon as possible. However, we cannot guarantee that we will list every request we receive — we will do our best to publish as many listings as frequently as we possibly can.

Thanks and look forward to hearing from you!