The number of Applications on Facebook has risen continuously since Facebook announced its Developer API in mid 2007. While there has been a slew of applications, it is very easy to see a clear trend. As much as 50% of the applications on Facebook are identity definition applications like Characteristics and Compare People, where people characterize their friends, and get characterized in various ways. A big share of the rest of the pie is taken by communication enabling applications like FunWall and SuperPoke which identified the limitations in Facebook early-on and made a field-day of the lower restrictions on spamming in the early days of the Facebook Developer Platform.
Is that all? Can a Facebook Application go beyond the fun to be had out of throwing cows at people, and try to do something that is useful, engaging and fun at the same time? Is there much sense in trying to do anything like that on Facebook? Why not an independent site? These are big questions. And questions any one launching a web-app today must answer.
On taking a close look, it seems it makes sense for a lot of web-apps to start out on Facebook, and here’s why:
1. An existing Social Graph: Any web-app that needs connections between its users to be established should consider being on Facebook. It makes a lot of sense to utilize the connections that people have already built on Facebook with their friends, family and strangers, than to try building it all over again from scratch in a stand-alone web-application.
2. Diverse user demographics: While almost all of the current most successful applications on Facebook have ridden on huge activity of teenagers on Facebook, there is a continuously rising base of users who are post their mid twenties, are college grads, and are not really interested in xMe and SuperPoke. A “useful, engaging and fun app” sure might appeal to them.
3. Freedom to Developers: Facebook allows developers to do pretty much anything inside their applications as long as they do not bother Facebook users who don’t want to use the application. This allows developers to do just about as much they could have done on an independent web-site, at a place the user frequents often.
The above three factors, combined together, offer a very exciting possibility for anyone launching a web-app today. Your web-app might be of the “serious” kind, and not as much “fun” or “viral” as a FunWall or Compare People, but it would still make a lot of sense to launch it on Facebook. What more, a “serious” application can potentially put the Social Graph to more interesting, beneficial and directly monetizable uses.
Of course, the opportunity comes with its own set of hazards. More later!
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is iAspire like 43things.com ? Wonder if 43things also has a facebook application!
Hi Deepak,
again, two things 🙂
1. Targeting an app on Facebook only on Indian users might not make sense now, simply because there aren’t enough Indians on Facebook. We have targeted our app at just about everyone on Facebook, and we have got fairly good response from all cross sections. Though I am sure that the time for India centric apps on Facebook will come soon.
2. Your observations about valuations are right, but I have just one comment there:
-> Better apps, where people REALLY communicate, and not just throw cows at each other will see better monetization possibilities, and better valuations per user. On a platform like Facebook, communication and discovery are the key. The apps that crack this have much more probability of being valuable in the long run. Deep user engagement is very important, and that is something very few apps have achieved till now. Average number of page views on most apps per visit languishes at 2-3, and people rarely visit an app again.
On iAspire (http://apps.facebook.com/aspirations), we have an average page view per visit of 9-10, and we have a good number of people returning to the app. I think if we can sustain that and grow the user base, we’d have created a lot of value.
Thanks,
-Niraj
Interesting thanks. Speaking to you offline on the development bits.
Did some research. Some valuations I found:
http://mashable.com/2008/01/16/snap-interactive/
A company with about 5.5 million users on FB, made about 388K or 7 cents per user revenues. The author extrapolates from their market cap and comes to a valuation of about $1.4 per user.
Slide got recently valued at $550 million, and it has what, 150 million users across its networks? And it does facebook, myspace, beebo and all sorts of other networks as well. So that’s about 3 to 4$ per user on a valuation basis. [But the slide founder was ex-Paypal, has lotsa cash, has proven pedigree and all that]
How much could an app get if it were India focussed? WihProbably 100,000? 200,000? 500,000 at the max one thinks. (The “India” network currently has some 560K members] That lends itself a $2 million valuation, if you were really really lucky. Not very inspiring for the app creators for the Indian market.
[For global app mileage will vary]
Maybe this whole social network app only makes sense if I were to get people to feed social structure into my app. So it’s more a marketing expense rather than a balance sheet asset. Ah.
Hi Deepak,
Honestly, 500 is peanuts. But then, we have just past the validation stage where we confirmed that the initial users like the product, and would return to it. We are going full steam on marketing (don’t ask me how, I’ll tell you the recipe once it has worked 🙂 now, and hope to get around 5000 users in a month. A good user base for a facebook app like iAspire would be a total of 100,000 with around 5% daily active, which is around 5000 users visiting the app daily. That will be very credible. We’ll need around 10-12 months to achieve that, given we don’t have much money to spend on marketing.
As for your site, I am sure you have done your due diligence, and are right to confirm that you don’t have the critical mass of people to target on Facebook. My comment there is that don’t give up completely on Facebook, because the diversity of the Facebook user demographics is on the rise. I see people of all kinds, and of all backgrounds joining in.
I am sure OpenSocial makes a lot of sense to you. We have started doing a deprecated version of iAspire for OpenSocial, and are also taking consulting offers. So please let me know if we can do something for you.
Thanks,
-Niraj
If I may ask, Niraj, what is the number of users you would target before you start thinking of monetisation? I see you have “52 daily active users, 9% of total” as reported by facebook. I’ve no idea what that means , but it points to about 500 users (?). Pretty good for about a month, methinks, and good luck to you.
I ask for a selfish reason, because I want to figure that out for our site as well. Though we’re in a different space, there is probably a user metric that confirms “traction” at least to the point where you can say, “kuch to hai”.
We’ve nearly given up on a facebook application – the searches point to some 180 profiles that show interest in the Indian stock market. But Orkut is attractive and Opensocial may make a big difference.