A Few Important Concerns From the Facebook App O'Reilly Report
This past weekend Tim O'Reilly released a report that showed a curve in the number of users of Facebook apps. Today, Erick brought Tim's post back with his own discussion about the chart and included a full top 200 Facebook apps in terms of active users.
Context & Ripple Effects
Three days after Tim O'Reilly published his long-tail analysis of the Facebook application market on O'Reilly Radar, Erick has revived the chart with his own commentary and a full ranking of the top 200 Facebook apps by active users. The pickup by TechCrunch and Download Squad shows how quickly the finding traveled: the June app feeding frenzy that followed the platform's opening has produced a usage curve ruled by the few.
The timing matters because Facebook is simultaneously tightening its own filters — the fbFund grant program announced by Mark Zuckerberg at TechCrunch40 is requiring all applications to be resubmitted — while rolling out self-serve Flyers ads and being described in the same discussion as potentially the biggest and most valuable database in the world.
First-order effects
- Developers outside the top-ranked apps now have hard data showing their install base is thinning relative to the leaders, raising the bar for what counts as traction when fbFund applications are resubmitted.
- Facebook gains a public benchmark of its platform's health just as it courts developers with fbFund grants and monetizes attention through member-created Flyers display ads.
Second-order effects
- App makers competing for scarce top-200 slots will lean harder on viral mechanics and paid promotion, shifting spending toward whatever distribution channels Facebook controls or sells.
- Investors and grant-makers like fbFund can use the concentration curve to triage the field, concentrating capital on the few apps with demonstrated active-user momentum rather than spreading it across the tail.
Third-order effects
- If the pattern holds across social platforms, application ecosystems will consolidate around a handful of winners per category, making the platform operator — here Facebook — the gatekeeper that decides which apps reach users and on what terms.
- A market where one company holds both the user graph and the ad inventory points toward structural dependence: developers building on Facebook accept that the same company sets distribution rules, grant criteria, and advertising pricing.
The trend: Social-network application markets are settling into power-law concentration, with a few apps capturing most active users while the platform owner tightens control over distribution and monetization.