Monetization and the Facebook Ecosystem

Platform eco-systems need a way for developers and creators to make real money or they will die. My question of the day: Does Facebook have this?

As a developer, the Facebook platform gives me a terrific opportunity to attract many users virally in a way that is not possible on my own domain. But am I building a business or just working for Facebook for free? Word Ads can be as low as $0.05 CPA (thanks @shalunov) and users are already at their destination (rather than on a search results page) so are not inclined to click away via an ad.

At the launch of the MySpace Developer Platform Launch in Sydney this week (nicely organised by Randal and streamed by Pollenizer) Markus Weichselbaum, the CEO of TheBroth , was asked: “What’s My Stripper Name - How did you monetise that?” 17 mins into this video of the event:

“It’s monetised by a product by IAC. IAC is a very large company called Ask.com and they have a whole division called FunWebProducts. This is a browser based toolbar that allows you to glitterise stuff, send smileys and in return, for them, basically installs a search box in your browser which will then, for them, show sponsored results. So if you do install the toolbar, and you use the search, they make money and in order for you to do that they offer you the extra stuff so you can glitterise things.”

Hmm. Sounds like an adware strategy to me. No different to the kind of business Kazaa found itself in when the value of ads in a popular social destination site were driven to nothing. I couldn’t actually find the toolbar download in What’s My Stripper Name? but did find it on TheBroth’s ClicktoGlitter. The toolbar is Webfetti. The terms of use show that it is classic adware that puts a large amount of junk on your machine to maximise revenue generation even when you are not using the app that installed it.

2. Features of the MyWebSearch Toolbar

By downloading the MyWebSearch toolbar, you will be installing a toolbar in your Internet browser (and any supported email functions and instant messenger functions) with the following features:

SEARCH BOX: This is a search box located within the toolbar that will help you search the Internet with search results from Ask.com.

SEARCH ASSISTANT: This provides relevant links and results when you make a search request in your browser address bar or if your browser address (DNS) request is invalid, misspelled or incorrectly formatted.

WEBFETTI: This feature enables you to customize a social networking profile page with layouts, graphics, custom cursors, music and video.

ZWINKY: This feature allows you to create and modify avatar characters, and use them in a social networking environment. If you use Windows XP, the ZWINKY feature will also automatically provide you with an icon that will appear in your Windows XP system tray at the bottom right of your desktop. Use of the Zwinky feature is subject to separate terms of use at http://info.zwinky.com/zwinkyinfo/tos.jhtml.

SMILEY CENTRAL: This allows you to insert smiley face emoticons and other graphics into your web-mail, Outlook, Outlook Express and instant messages.

POPULAR SCREENSAVERS: This provides you with photos and images that can be added to the user’s screensaver or PC desktop wallpaper. Also includes the ability to add personal digital photos.

MY FUN CARDS: This provides access to free electronic greeting cards that you can personalize on the Web and send to any email address.

CURSOR MANIA: Free computer mouse cursors that allow the user to change the look of his/her default cursor to something more fun and expressive.

FUN BUDDY ICONS: Free icons that can be added to an instant messenger client.

HISTORY SWATTER: This allows you to delete easily computer cookies, URL history, temporary cache, and other stored browser files.

POP SWATTER: Free tool that swats pop-up ads before they appear. Includes a “Safe List” to allow pop-ups from user-specified web pages.

SMOTOS: This enables you to post, upload, share, download and store images, and allows you to send such images to email addresses of your choice.

MY INFO: This provides one-click access to news, sports, weather, finances, horoscope, movie listings, lottery results and more, which appear in a thin window to the immediate left of your main browser window.

MY MAIL NOTIFIER: This allows you to use animated characters to alert you to new web mail messages.

MY MAIL SIGNATURE: This allows you to create signature designs to place in the footer of outgoing email messages.

MY MAIL STAMP: This allows you to insert digital stamp designs into outgoing emails.

MY MAIL STATIONERY: This provides you with background images, colors and themes to enhance the look of outgoing email messages.

Is this the destiny of Facebook applications?

Returning to the MySpace launch, Mick relayed a question from Richard McMannus at ReadWriteWeb: “Is Hypertargeting hyperhype? (19:30 on the video). Markus answered:

“I don’t think so. I’ll be very straight… Currently Facebook gives you absolutely nothing to help you monetise.  But, with MySpace and Hypertargeting, even if its just 10% as good as it sounds, it will be a substantial help for developers to monetise.”

Who can say whether Hypertargeting will work, but I think that MySpace are correctly thinking about the ecosystem in adding it. Without it, developers fail to make money, so they trick people into inviting their friends, create booster apps that have no value other than to get you to install another app, cover the screen in a cacophony of  ads and then install adware on your PC, then…  the users leave.

Am I being too simplistic?  Does anyone have any great examples of Facebook applications making money and retaining users? I’d love to hear about those if you do.

Filed under Random Thoughts, Software Development |