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You Can't Make Money With Facebook ... What A Load Of ...

... rubbish!

The current issue of Business 2.0 magazine has a great piece on "The Facebook Economy".

They talk about two guys called Shen and Tokuda who started the slideshow app on Myspace. Their uptake was doubling every day and was costing them $20,000 a month in hosting fees. It wasn't until Facebook and their encouragement of developers to create their own aps did they start making serious wonga.

Within two months of converting the slideshow app to the Facebook platform they had accumulated $200,000 in ad revenue. By July this year they had created another 14 apps and had 22 million users.

If you looked at the whole app thing there were 2,500 new apps in the first ten weeks which triggered 139 million downloads. And the investors’ eyes are glinting.

Venture capitalists Bay Partners have set aside $12 million to fund 50 new Facebook applications. Salil Deshpande is a partner in the company said to Business 2.0 magazine that the "current apps only scratch the surface of what is possible ... We're looking for much more sophisticated applications that can make money."

If you've used a Facebook application, you'd probably see that the revenue generating model is basically built around Google Adsense. The future is much brighter than the odd CPC click. The magazine outlines that there are four main ways to generate revenue from Facebook:

1) Sell Adds
2) Attract Sponsors
3) Sell Services
4) Sell Products

You've probably seen the Slide applications, their CEO, Max Levchin has said that they "intend to build a giant company on top of these social operating systems ... It's an opportunity for us to build the next Electronic Arts, Intuit or Adobe."

And I'm sure they can do it.

So what would make money with Facebook? Well senior platform manager Dave Morin says "the stickiest applications are those that tap in to the "social graph." Just like affiliate marketing it's the applications that are more content that sales will make the most money, in my mind there are direct parallels. Business 2.0 talk of the (fluff) Friend application - which is a virtual animal your friends can pet and feed etc. To me, crap, but to loads of people out there - fantastic. In just seven weeks they had 1 million downloads and is increasing by 10,000 a day.

If you wanted to research which applications have the most users and which are the fastest growing then I'd recommend you pay a visit to It's pure Facebook apps pornography. If you're interested in Facebook apps, I'd recommend you spend some time on there.

So what makes a successful Facebook App? Well it has to:

1) Be simple;
2) Ideally mimic existing Facebook features (like poke etc.);
3) Match the social process.

But what of the future?

With so much revenue being generated, application developers could be forced to pay per download if Facebook goes public. Facebook itself is making good amounts of money. But when you see what's happened to Google since their float (grabbing every dollar they can), you can expect to see Facebook doing the same.

What should I do know?

If you got a few quid and a degree of determination, take a look at Appaholic and see if there's anything you can learn from there. Look at your current offering and see if it can be Facebookacised. Then try and find a Facebook developer.

I'll be going into more detail over the next few days about how I think people can make money from Facebook - I may be wrong, but what have you got to lose?

p.s. get ahead and read about Garage Sale and Web 2.0 List now.

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