The rise in popularity of the soon-to-be number 1 social network site Facebook is due to a combination of two things.
1. Formerly a hangout only for high school and college students, Facebook allowed anyone to join in September, 2006.
2. In May, 2007 Facebook opened up it’s network to developers.
By opening up it’s network to developers Facebook has provided a way to make money right on the Facebook web site. Something you can’t do on MySpace. The only way to make money off of MySpace is by attracting users to another web site outside the MySpace community and making money on that site.
Below is an Alexa traffic comparison of the top two social network sites. Bold prediction: It won’t be long before Facebook becomes more popular than MySpace.
Facebook: a developer magnet
Since opening up it’s network to developers Facebook has seen a flood of new applications created. In fact, over 1000 developers are signing up every day.
Addonomics, an open analytics platform that tracks Facebook application growth and provides stock-market-style analysis of Facebook features says that as of today…
There are 342,015,965 installs across 5,118 apps on Facebook.
These applications were used 23,360,190 times in the last 24 hours and have a combined valuation of $249,800,000.
Facebook has approximately 40 million Unique Active Users in the past 30 days and a valuation between $10Bn and $15Bn.
This translates to between $250 and $375 per active user.
7 ways to make money with Facebook
In The Facebook Economy Business 2.0 outlined a few ways application developers are making money off of Facebook.
1. Selling advertising space
Facebook apps with large audiences can make a lot of money selling ad space on their page through ad networks like Lookery, Userplane and Google Adsense.
2. Sponsorship
Advertisers are lining up to sponsor popular Facebook applications. The Food Fight! application which lets you throw virtual food at your friends is soon to be serving up virtual chicken wings from a major food chain. Tyson???
3. Sell goods and services
The future of Facebook applications is utility, not fun. Facebook application Band Tracker searches upcoming concerts and links to ticket vendor web sites. Soon, it will be common for people to make purchases from their own Facebook pages.
Lee Lorenzen, CEO of Altura Ventures provided us with the following four ways to make money with Facebook.
4. Write a Facebook book
I’ve heard about a number in the works and that means advances/royalties for authors.
5. Write a Facebook blog
There are already a number of good ones beginning to cover the Facebook eco-system but there is room for more. Once you have an audience for your blog you can start selling ads and sponsorships.
6. Develop Facebook apps as a consultant
Good / great Facebook developers are in very limited supply and so the demand is high. I’ve heard of hourly rates in the $200 per hour range for folks who can architect, write and deploy viral Facebook apps.
7. Sell your Facebook app
If you can create an app on Facebook, get it to 10K to 100K users, harvest some ad revenue from it by partnering with AdBrite for CPM/CPC ads, offer Cost Per Install ads via Adonomics and you provide data to get an Adonomics certified valuation, then you will be in a position to get top dollar for your application should you decide to sell it.
At the moment, the big winners of the Facebook jackpot are application developers. The big losers might be other social networks like MySpace, if they fail to open up their networks.
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