Let me clarify something first. I don't really like Facebook in that, I don't enjoy using it or spending time on it. But then again I don't enjoy most things social unless they revolve around business. That said, here are my thoughts and an explanation of how I have approached it.
When Facebook opened up and let people build their own apps, I realized that like it or not, I had to sign up for a new social network so that I could learn it and understand it. I need to figure out if there is something I can do to make money from Facebook, or if it is best for me to leave it alone and focus efforts elsewhere. At the moment, it reminds me of the blogosphere back in 2004. In those days, a handful of people were talking about blogs as money makers, while most of us laughed and scoffed. Most of us were wrong, and there turned out to be a lot of money in popular blogs.
People are making crazy projections about Facebook, and even though I question the sanity of a $10 billion valuation, I think that people who develop unique popular apps will be making a lot of money this time next year, much like early popular bloggers have done well. So, after experimenting with the site and figuring out where we could add value, we hired a programmer to build us an app. For a small fee, that allows us experiment with Facebook and figure out things like:
- How difficult is it to distribute a new app?
- What kind of CPMs work for Facebook apps?
- What are the major revenue drivers (installs, daily uses, ads per page, etc?)
- What kinds of apps are most popular?
- What can a Facebook app offer that other platforms cannot?
So we built the Daily Deal. There are two particular reasons I think the app is unique. First, any Facebook user can offer a deal to all the users that have the app installed. It could be a large corporation, a small company, a brand new company that offers the deal. It could even be a guy that just designs a t-shirt on Cafepress and sells it through the app. I think that kind of democracy meshes well with Facebook. All you have to do is click "offer your deal" and pay $1. Over time, as more people install the app, we will either raise the offering price or will take a cut of sales through the app… or who knows, some other revenue model may emerge.
The second reason I liked this idea is that, compared to other deal/liquidation options, I can provide detailed demographics about the purchasers because I can pull that from their Facebook profiles. What I would like to see is major companies offering limited edition stuff or new product launches through the app, in order to gain the demographic feedback about buyers. Maybe that's a good idea. Maybe it's stupid. We'll see. My business philosophy is one of experimentation, and I don't consider it a waste of money if I learn a lot from launching the app.
The other thing I like is that, unlike the website world, Google has no say in the popularity of apps.
So now we are beta testing our app, using affiliate links this week to work out the kinks, but we are looking for people that want to offer something through it, so add the app in Facebook, or just send me a note if you are interested and I can help you figure it out. Most importantly, let me know what you do and don't like about it. If it becomes popular, I want to begin customizing it to send custom daily deals to people based on things they have bought in the past, but that is down the road.
They key points are that Facebook is growing quickly, and the monetization of it (which admittedly may never emerge as people hope) hasn't been totally figured out. The ratio of potential reward vs. risk to experiment in this space is very high. Even though I don't particularly like all the regular Facebook stuff, thinking about future directions it could go and where the primary revenue will come from is a lot of fun. Back in 2003 I started "playing around" with a blog and it turned it something fairly lucrative for me. Facebook has even more potential.