Concomitant with the debate about Facebook’s valuation ($5… $10… $15…$100b…?) is a somewhat more restrained discussion about the value of applications being built on Facebook’s platform and the value of the users that interact with these apps. Despite the fact that more than 40 million people use Facebook– 50% of them daily— there remains skepticism about the long term value of these users to advertisers.
Historically, Social Networks have generated tons of page views but have had a hard time monetizing these impressions. “Professional” content properties focused on deep verticals, such as C|Net and BabyCenter.com, regularly attract $20+ CPM ad rates, whereas “amateur” social media sites like Digg, MySpace and others are lucky to generate CPMs above a few dollars with any consistency.
Three primary critiques have emerged in recent months that call into question the viability of social media being produced on top of open social platforms, exemplified by Facebook:
1. Facebook apps are not real media
A few weeks ago Kara Swisher dismissed Facebook apps as a “children’s hour:”
And if that is all there is, can Facebook really build a viable and long-lasting business on what is essentially a bunch of games that will ultimately become wearying for users? Doesn’t it need more robust apps that actually are useful and relevant and make Facebook the service that Zuckerberg has often told me was a “utility”?
Kara suggests that real social media apps would be robust, useful, and relevant; not the inane, ephemera of super poking, graffiti walls and food fights. Despite the apparent lack of utility of Facebook apps, they are exceedingly popular. Take Slide’s suite of apps (led by TopFriends), or Rockyou’s, or Grafiti, or the hundreds of apps across our Social Media network- together all of these apps are generating hundreds of millions of page views each day. And none of them existed six months ago. It is curious to think whose media is being displaced by all of this new attention: Are people turning fewer pages on MySpace? Spending less time reading blogs in their feedreaders? There is little doubt, in 2007, that MySpace (Fox) and Blogs are legitimate forms of media. Which begs the question: is media defined based on something innate in terms of its form, or is it instead defined based on its usage?
There are interesting parallels to Facebook apps t0 be found in the recent history of blogs. In 2003 and 2004, blogs were dismissed by traditional Internet media as being nothing more than narcissistic ruminations about the vagaries of everyday life. After all, who really cared about what Fred Wilson listened to at his Amagansett beach house? Flash forward a couple of years and blogs have become big business. Although my blog and your blog together might only generate a few dollars a month via AdSense, “professional” blogs such as Huffington Post and Engadget are generating millions of dollars of revenue and taking reader-share from NYTimes, MSNBC, and others. John Battelle and his team in Sausalito are building a viable media franchise representing premium blogs such as BoingBoing to advertisers looking to participate in “conversational media.”
Just like the post is the expression of the blogger (and the article is the expression of the journalist), so the app is the expression of the developer. Unlike blogs and traditional Internet media sites, however, apps do not provide content. Instead, they provide a structured, social environment where content can be created. The media, in this case, only comes to life through the social interaction of two people. Facebook’s open social platform is a printing press not a book. The app is the book in the social media universe. Just as with books, apps focus on certain themes and relate to specific audiences. The author of the app- ie the social media developer- publishes code that facilitates a certain kind of collaboration among a target group in her social graph.
The first products of this new kind of printing press may well end up looking trite and ephemeral, with the benefit of some longer historical perspective. But so were most of the first books, and Internet sites, and blogs. But there is no doubt as to the viability of even these early experiments as legitimate media properties.
Coming next: #2: “Facebook apps are all head, no tail.”