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Chronicles

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Why So Many Want to Create Facebook Applications

Site's Growing Ranks  —  Seen as Potential Source  —  Of Revenue, Customers  —  Another online gold rush is on.  Entrepreneurs are scrambling to create small software programs for Facebook Inc.'s social-networking site and grab footholds in its emerging economy.

Wall Street Journal Riva Richmond

Context & Ripple Effects

The scramble the Journal describes has been building all summer: CNET catalogued a Facebook app feeding frenzy back in mid-June, weeks after The Webpreneur asked bluntly whether there was any point in launching your own social app at all. What changed by September is scale — enough entrepreneurs now treat Facebook's member base as an addressable market that the paper frames it as a gold rush economy rather than a curiosity.

The bet is straightforward and unproven: Facebook hands developers distribution to millions of users for free, and developers repay it with features and stickiness Facebook did not have to build itself. Whether any of those small programs can actually convert attention into revenue is the open question both earlier pieces circled.

First-order effects

  • Thousands of independent developers redirect their effort toward one company's platform overnight, making Facebook's user base — not the open web — the primary distribution channel for consumer software experiments.
  • Facebook acquires an expanding feature set at zero development cost, deepening engagement on its own site while ceding none of its control over access to members.

Second-order effects

  • Rival social networks face pressure to open their own application platforms or watch third-party innovation concentrate exclusively inside Facebook's walls, since developers follow whichever audience is largest.
  • Discovery inside Facebook's app directory becomes the scarce resource, shifting competition from who builds the best app to who gets surfaced — an opening for early movers to convert rankings into durable user counts.

Third-order effects

  • Consumer software splits into two classes: apps that own their destination site and apps that live inside someone else's, with the latter accepting that a single company controls their reach and economics.
  • If the pattern holds, platform owners become the gatekeepers of web distribution much as operating-system vendors were on the desktop, setting up recurring conflicts over revenue sharing, data access, and developer independence.

The trend: Social networks are evolving from destinations into application platforms, and developers are trading independence for access to hosted audiences — the template every large consumer platform fight since has followed.