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Chronicles

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Building apps for Facebook: A dance with the devil

Facebook has created a booming app economy that's made plenty of developers rich.  It's also forcing a lot of them to lose sleep.  —  Facebook CEO Mark Zuckerberg  —  Dalton Caldwell caused a stir recently when he posted an open letter …

CNET Paul Sloan

Context & Ripple Effects

Five years after Facebook's app feeding frenzy turned the platform into a developer gold rush, the mood has inverted. Forbes flagged fear among Facebook developers as early as November 2007, and by 2011 AdAge was reporting that rising costs were leaving developers in the lurch — the economics of building on Facebook had been souring long before this story ran.

The trigger here is Dalton Caldwell's open letter about what it takes to build apps on Facebook's platform, which forced a public conversation about a dependency Zuckerberg himself has celebrated: an app economy that made many developers rich while leaving them exposed to a single company's rules.

First-order effects

  • Developers currently building on Facebook face the direct trade-off the article names: access to a massive distribution channel in exchange for sleep-losing dependence on unilateral platform decisions.
  • Caldwell's open letter puts pressure on Facebook and Zuckerberg to respond publicly to complaints that until now lived in developer forums rather than headlines.

Second-order effects

  • Rivals courting third-party developers get fresh ammunition; the defection question Bits raised back in October 2007 — whether Facebook's developers will build elsewhere — returns with better evidence behind it.
  • Developers weighing new projects will price platform risk into their choices, favoring multi-platform strategies over Facebook-only bets, which thins the pool of exclusive apps on Facebook itself.

Third-order effects

  • If the pattern holds, platform owners like Facebook will need formalized developer protections — clearer API terms, revenue guarantees, governance — because informal goodwill stops scaling once the dependent ecosystem is large enough to make headlines.
  • The episode feeds a broader structural question for every walled-garden economy: who bears the risk when a platform can change the rules its entire third-party business base depends on overnight.

The trend: Platform-dependent app economies are maturing from gold rush to bargaining problem, with developer pushback forcing platform owners toward more formal governance of their ecosystems.