Facebook, Facebook and Facebook again. Seems like you can’t get away from it. O’Reilly now published a report on the widget and application economy of Facebook and the long tail characteristics of which.
Sizes up the Facebook opportunity–who’s making money, and how?
Lays out best practices of marketing with Facebook Applications, aka Social Media Optimization (SMO)
Identifies the top 200 Facebook applications and plots their growth rates
Goes beyond Facebook, and scopes out the emerging widget economy
Not sure if I want to dish out the $150. But if so, it should be worth at least for finding out about what they say for the last point: scoping out the emerging widget economy. This is definitely a trend worth watching!
Sometimes it feels like there never is a single day without news about Facebook. Today, the New York Times published an article about „investing in a theory“ – the fact that there is a hype about participating on Facebook, programming widgets, earning revenues in any way possible. But nobody really found out how just yet:
Now it appears that such exuberance has infused the expanding Facebook universe, even though no one has yet proved it is possible to build a profitable business with sustainable revenues on the site. Some developers report earning tens of thousands of dollars in advertising with the applications they have created. Yet their applications are mostly running ads promoting other Facebook applications — a situation that recalls the earliest Gold Rush miners, who earned a living selling shovels to other miners. And developers must cover the cost of hosting the applications on their own Web servers.
Nevertheless, people are as optimistic about this as they were about the whole industry some 7 years ago.
This summer, Lee Lorenzen, a venture capitalist in Monterey, Calif., who describes himself as “the first Facebook-only V.C.,†started a $25 million Facebook investment fund and introduced a Web tool, at Adanomics.com, that assigns a monetary value to Facebook applications.
There are 348,289,583 installs across 5,160 apps on Facebook.
These applications were used 25,756,704 times in the last 24 hours and have a combined valuation of $286,885,848.
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.
… a combined valuation of $285 million! $250 valuation per user! Hard to believe, but that seems to be the reason why Microsoft decided to invest in Facebook. (A small amount that will dent their annual report like a rounding error.) So is this a real deal, or is it a hype?
The optimism of some of the widgets programming marketeers are so optimistic, that it makes me sceptical.
„We have the potential opportunity to create the new MTV,†(iLike)
Mr. Lorenzen values popular Facebook applications likeWhere I’ve Been (lets users show which countries and states they have visited), Texas Hold ’Em Poker and What’s Your Stripper Name (suggests what you and your friends would call yourselves on stage) at around $2 million each.
Most hope to either attract Facebook-users to their website and offers, some might publish ads on their widget canvas. But will that really be enough to sustain these valuations?
On a side note: If advertising is the model for generating any revenue, Facebook might actually perform much worse than other sites, because people are so familiar and engaged with the existing contents/widgets, that ad banner blindness will be much more common amongst these users than visitors of other media sites. That’s at least what some people say, and I think that is a reasonable assumption.
However, it could also imply that any click on a banner on Facebook is probably much more valuable than clicks on other networks. Simply because it wasn’t an accident or pure boredom. The user is actually interested in whatever the banner offered.
Soon enough, apparently, Facebook will start targetting ads using information they take from the profiles (makes sense, doesn’t it?), so ads should also become much more relevant.
The whole phenomenon of Facebook widgets definitely needs to be watched carefully, and I don’t think it would hurt for companies to test the water publishing small widgets and measuring the effects. But I am still sceptical about this exuberant optimism. Prove me wrong, I would be very much delighted to report on successful tactics any time!
1. Semantic Web
2. Artificial Intelligence
3. Virtual Worlds
4. Mobile
5. Attention Economy
6. Web Sites as Web Services
7. Online Video / Internet TV
8. Rich Internet Apps
9. International Web
10. Personalization
All are more or less relevant for digital marketing. But especially points 4., 5., 7., and 10. should require our focus. I think these are the most relevant things that will drive the biggest changes to digital marketing in the future. Read the background to these here.
Just last weekend, when I was buying grocery for my farewell party from Frankfurt, I noticed that supermarkets already stock christmas cookies and bakery – but it’s only beginning of September…It starts earlier every year it seems, doesn’t it?
Giles Rhys Jones is also rather early: He already predicts the Digital Advertising Trends for 2008. The trends he lists are all about the changing agency landscape. And he’s right about them, I think. The way agencies will work will change (does change already). The skills needed will change, too.
Don’t look now, but the role of the industry’s biggest bully is increasingly played by Apple, not Microsoft. Here’s a look at how Apple has shoved Microsoft aside as the company with the worst reputation as a monopolist, copycat and a bully.
Here is the best statement:
iTunes for Windows‘ popularity isn’t driven by software product quality. ITunes is the slowest, clunkiest, most nonintuitive application on my system. But I need it because I love my iPods.
That is sooo true!
Of course Apple is far away from being a monopoly, unlike Microsoft is or at least was. But the monopolistic behaviour is similar.
Amazing, but considering the fact that the Apple brand is almost religiously embraced by its fans to an extent that could make the catholic church jealous, we can clearly see what makes Apple so successful:
Fantastic marketing.
While Microsoft always focused on either purchasing small(er) software shops to extend their portfolio or to dictate terms on their partners, Apple focused on marketing. Hey, it also worked for Nike in their battle against Adidas.
It all comes down to a simple rule: People don’t purchase products. People buy ideas, dreams or beliefs. And Apple sells exactly this. Apparently, they were rareley the first to launch certain types of products
Off the Record, a German advertising blog, pointed me to a site called MarketingApple by Steve Chazin, uncovering the secrets to Apple-style-marketing.
Wo ich sonst so bin...