Social networks have a lifecycle: They start with a small core of early adopters, swell as mainstream users get pulled in by their friends, and then see growth taper off as people get turned off by spam. That's why Friendster is forgotten and why MySpace is looking increasingly stagnant. The price for reaching an audience advertisers care about seems to be a site users can't stand. Facebook, however, isn't following the fashionable trend.
The Barnumesque blather of Facebook's platform evangelists is matched only by the bombastic inclarity of Salesforce.com CEO Marc Benioff. How fitting that the two companies came together earlier today to obfuscate their joint efforts. When Facebook agent obscurateur Dave Morin posted about the incident, his colleague, engineer Luke Shepard, bravely scratched his head in public, on Morin's Facebook profile.
Silicon Valley's bubble in Facebook-apps startup has been our own local version of the crisis in toxic mortgage securities. With venture capitalists growing leary of the concept, developers have been eagerly awaiting the outcome of Facebook's FBFund, a grants program for applications startups. Results were promised on September 22, then again last Friday; Facebook still hasn't made a decision on the lucky winners. Why? Because Facebook's applications platform has become, like everything else in the company, a scene of rabidly intense politicking.Here's an update for anyone who didn't get the memo: Facebook's applications "platform," a set of software tools for embedding timewasting entertainments within the social network's pages, is not a level playing field. Some applications are more equal than others. That's only become clearer since Facebook foolishly put Facebook's platform in the hands of its top flack, Washington-trained bloviator Elliot Schrage. Facebook's Great Apps program, meant to designate higher-quality applications, has become a shameful excuse for nepotism. Awarding money on the merits is hard enough. When you mix in the need to help out your COO's brother-in-law's pet startup, or your ex-president's latest venture, it complicates matters. Is Facebook going to come out with a list of apps to fund that it's truly proud of? Or will this look more like an appropriations bill after it's made its way through Congress, larded with earmarks?
A tweak to Facebook's new site redesign, which goes permanent today, removed a link to "recently used applications" from the site's applications drop-down menu. Its got the third-part developers who make those applications up in arms because they say removing the link will make it harder for users to come back to their widgets. One developer wrote us to say "if this sticks today marks the end for 3rd party applications." The "Developer Feedback to Facebook" forum is full of similar complaints. "I already have users complain that they can't find apps again on the new profile after first using them. the latest changes will make it even harder," writes on developer. Another: "Yup, this is a very intense change. And pretty useless from a user experience point of view. Hopefully they roll it back immediately or it was just a mistake."
At a recent party to celebrate developer Joe Hewitt's latest release of the Facebook application for the iPhone, friends treated Hewitt to champagne and a cake decorated with, naturally, an iPhone running Facebook. Of course, moments later, pictures of said cake showed up in partygoers' news feeds and were automagically displayed on their iPhones. And you doubted the power of technology to change the world for the better.
Today at Facebook's developer's conference, social games widgetmaker Zynga will announce a $29 million round of funding — the company's second — led by Kleiner Perkins, the VC firm that backed Amazon.com and Google. Zynga has also acquired virtual world app YoVille and added former Electronic Arts creative exec Bing Gordon to its board. The company makes games like Poker and Attack, a Risk clone, for Facebook and other social networks. Zynga founder Mark Pincus told the Wall Street Journal that Zynga has 18 million monthly visitors and adds another 450,000 users a day. Kleiner Perkins partner John Doeer said his firm went ahead with the Zynga deal because of that kind of growth, telling the Journal Zynga has "cracked the code" on how to develop games that go viral fast. But really, how Zynga adds new users isn't all that complicated, clever or sustainable.
Facebook will follow its F8 developers conference this Wednesday with another 8-hour "hackathon" for third-party developers and Facebook engineers to work on widgets. This will be fun to watch, because those two groups kind of despise each other right now. Last spring, Facebook began taking a hardline stance against widgets that spam users or violate privacy rules, even going so far as to temporarily remove popular apps like Top Friends and Super Wall from the site this summer. Then, a beta test of Facebook's new profile revealed a new feature that made Slide's Top Friends redundant. Slide responded cheerfully to the news, but one exec at a widgetmaker told us that if Facebook keeps up the regime of enforcement and copycat apps, venture capital for Facebook-focused startups will dry up. Of course, we hardly expect a brawl or even public arguments during the "hackathon" — passive-aggressive Twitter notes and other forms of repressed resentments, anyone? Developers, save yourselves the future therapy bills. Just do what Facebook wants and build the kind of apps its employees describe in the video below. That seems easier.
Over the past month, Facebook has shown itself to have a quicker trigger when it comes to banning applications from its site for rule violations. It's part of the reason, observers say, that venture capital for Facebook-app startups is slowing down. The punished include apps from major developers RockYou and Slide. But they also include guys like developer Dan Abelon, who saw his popular SpeedDate widget booted from the platform for a couple hours earlier this month. Abelon told Inside Facebook what other application developers should do to make sure the same doesn't happen to them. The bullet points — which paint a picture of Facebook as a fairly ruthless enforcer — are below, trimmed to give widgetmakers more time to call those VCs who suddenly all seem to be on vacation all the time.
Facebook will not launch a payments system for its platform application developers at the upcoming F8 conference. Inside Facebook says though Facebook engineers are working on a system, it just won't be ready in time — even though Facebook began asking developers to participate in a payments beta test last December. Silicon Alley Insider offers a stranger explanation: The Facebook payments system hasn't come out yet because Facebook founder Mark Zuckerberg "hasn't bought in to the idea completely."
They can't say they didn't have it coming. But widgetmakers are angry all the same about Facebook's decision to clone Slide's Top Friends application as a feature in its latest redesign. "It would be insane for a new developer" to begin creating new apps the platform now, says an executive at one of the many Facebook-applications firms watching the story. The exec says the VCs widget startups pitch for funding know it, too, and are closing their wallets. He blames Facebook's "new regime," including new COO Sheryl Sandberg and recently-appointed flack-cum-platform director, Elliot Schrage:
If you're the application developer and they're the platform owner, you have to know death can come at any moment: Create a popular, simple application, and the platform owner might just rip you off in their next release. It's happened to Max Levchin's Slide, maker of the popular Facebook widget Top Friends. With its latest profile redesign, Facebook now allows users to specify which friends they'd like to display to profile visitors. (See how Facebook's version works in the image above and you'll note that with the friends I've selected, my goal is to intimidate profile visitors with my powerful connections.) Before you feel too sorry for Slide, note that this is a feature MySpace has long offered. Slide, seeing that Facebook lacked it, promptly cooked up Top Friends, which filled the void. Top Friends is Slide's second most popular application with nearly 1.5 million daily active users. On the strength of those user numbers, Slide has raised $50 million in a recent financing round, and is opening an ad-sales office in New York. We asked for Slide's reaction. They were surprisingly chipper!
Widgetmaker RockYou acquired Pieces of Flair and Speed Racing, applications which, according to Facebook's directory, see about 432,042 and 190,441 daily active users. Terms of the deals weren't disclosed, but an industry insider says RockYou probably paid $1 million for Speed Racing and $2 million for Pieces of Flair. RockYou's most popular Facebook application, Super Wall, continues to lose traffic ever since Facebook turned off Super Wall's ability to send notifications to Facebook users.
Traffic to RockYou's popular Facebook widget Super Wall declined from 2.1 million to 600,000 daily users over the last few days, as Facebook blocked the widget from sending users notifications and messages, claiming RockYou had violated Facebook's privacy policies. RockYou CTO Jia Shen told Inside Facebook the allegations and their punitive response are "slightly debatable":
Facebook's third-most popular widget, Slide's Top Friends, is back after Facebook suspended it on June 26. (The offense: displaying Top Friends' users birthdays and other private information that wouldn't normally be visible on Facebook.) What took so long? Following the suspension, Slide wanted to call its apps the most secure on Facebook. To feel comfortable doing so, it contracted a third-party audit firm to review its applications and source code, Slide exec Keith Rabois told us. "The issue with Top Friends was fixed immediately," Rabois told us, "But as you might imagine an independent audit takes time to perform." Elsewhere on Facebook, Slide's privacy troubles seem to be spreading.
Facebook released its schedule for its second annual F8 developers' conference on July 23. Facebook's servile, so-called independent developers have three tracks to choose from: "User Experience," "Technical," and "Business." If you work for a Facebook widgetmaker, you're probably confused, because who among you trying to build a business on the Facebook platform doesn't also need to be fully briefed on its user experience and technical aspects? To clarify, we've translated Facebook's description of each track out of verbose PRspeak.
On Wednesday, Facebook and MySpace users who have installed Slide's near-ubiquitous SuperPoke widget — the one that lets you throw sheep — will be able to send messages branded with characters and slogans from VH1's stable of reality series such as Flavor Flav from Flavor of Love. It's all an effort to promote the new series I Love Money — which, surprisingly, does not star hypercompetitive Slide founder Max Levchin. Who knew?
For the makers of widgets, those annoy-your-friends applications littering social networks, it's fractions of pennies from heaven: AOL ad network Platform-A has promised Facebook and Bebo widget developers that it can guarantee them "one of the industry’s highest" CPM — cost per thousand pageviews — rates if they sign up for its Widgnet publisher network. A Platform-A source says widgetmakers will get about 40 cents per thousand pageviews. Which is, of course, terrible. "Most [widgetmakers] won't sniff $1 CPMs," AdWeek's Brian Morrissey snarks.(Photo by MrVJTod)