Facebook apps can make money

Mashable’s Adam Ostrow (disclosure – I work for Federated Media which represents Mashable) writes about the “fairly paltry” revenue figure generated by VideoEgg on Facebook applications. He writes:

The bottom line is that $1.5 million in revenue over 5 months for some of Facebook’s top applications simply does not seem like much, especially when you consider that MySpace is estimated to pull in $800 million of revenue this year.

I think the article misses the point and potential of Facebook apps as a business. There are supposedly 100 million blogs and most don’t make much money – even those with decent traction. Some however, and FM represents many of them, do very well and are seeing revenue growth that now rivals the audience growth they saw in previous years. I see a similar dynamic forming with FB applications. A handful of applications are making significant dollars through advertising, affiliate deals, etc. Others are seeing real promise. Most aren’t, and won’t, make much money ever.

Secondly, marketers are just beginning to think about how to create meaningful programs in these environments. I’ve written about one here.

Finally, myspace’s incredible audience and revenue growth came quickly, but most of the revenue came AFTER it was acquired by FIM. A great product is necessary. A great sales team with access and credibility goes a long way. Some applications are now getting these sales forces (I work for one) and revenue will come as a result.

(thanks Shankman!)

6 Responses to “Facebook apps can make money”

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  1. 1 Facebook Apps Not Making Money? at ChasNote Trackback on January 29, 2008 at 4:33 pm

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