Good News, Bad News about Facebook Application Market: Long Tail Rules
My team at O'Reilly Research has been crunching the numbers on the rise of Facebook as application platform, and we've released a new report today, entitled simply The Facebook Application Platform.
Context & Ripple Effects
The report lands four months after TechCrunch observed the long tail itself getting fatter, and a month after the Wall Street Journal profiled the gold-rush mentality driving the developer stampede onto Facebook's platform. O'Reilly Research now supplies the numbers behind both stories: the application market distributes along a long tail, which cuts against the expectations of the thousands of developers building apps — many, per the reporting, with inflated hopes of dot-com riches.
The timing gives the finding competitive weight. The story spread alongside VentureBeat's report that hi5 is building its own developer platform, and it comes amid unconfirmed speculation that developers could defect to rivals offering better participation and monetization. If most applications starve for usage on Facebook, competitors have a concrete argument for luring them elsewhere.
First-order effects
- Thousands of developers who rushed to build Facebook applications get hard evidence from O'Reilly Research that usage concentrates in a small head of apps, leaving the typical application with marginal reach despite the riches narrative that drew them in.
- Facebook gets a data-backed validation of its platform strategy, but also a public measurement — via O'Reilly Research's new report — of how unevenly its ecosystem rewards participants.
Second-order effects
- Rivals courting the same developer base gain an opening: hi5's platform push, reported by VentureBeat in the same news cycle, pairs naturally with the unconfirmed defection speculation among developers frustrated by long-tail starvation on Facebook.
- Value inside the ecosystem shifts from writing applications to securing distribution — discovery and placement within Facebook become the contested resources, since the long-tail data shows creation alone does not buy audience.
Third-order effects
- If long-tail dynamics hold across social platforms, application development splits into a professionalized head and a hobbyist tail, eroding the anyone-can-strike-it-rich premise that fueled the September rush.
- Platform owners' grip on distribution becomes the structural lever: the same concentration logic extends to whatever adjacent categories Facebook pursues next — including its rumored, still-unconfirmed music service reportedly targeting iTunes and label licensing deals.
The trend: Consumer web platforms are maturing into long-tail application markets where a handful of apps capture most usage, shifting value from creation toward control of distribution.