Gas Week

EWN Publishing

Life as a barnacle on Facebook’s hull could be profitable as social-networking site opens its service to outside developers

Posted by gasweek on 9 October, 2007

Facebook opened its service to outside developers this autumn, inviting them to create tools for the site and to try to profit from them, reported The Australian Financial Review (9/10/2007, p.39).

Developers’ digital toys boost Facebook value: Since then, more than 4000 applications have flooded the site, spicing it up with games, whimsical programs called widgets that let you turn your friends into virtual zombies, and more practical tools that let users display images of their favourite books, music, movies and wine on their profile pages. The wave of attention from users and developers has sent estimates of Facebook’s value soaring into the dotcom stratosphere.

Microsoft money bid fires up facebook exuberance: Last month, there were reports that Microsoft was considering a $US500 million ($557 million) investment that would value the three-year-old company at up to $US 15 billion. Now it appears that such exuberance has infused the expanding Facebook universe, even though no one has yet proved it is possible to build a profitable business with sustainable revenues on the site.

Confident geeks won’t sell out for less than $10m: Nevertheless, Silicon Valley venture capitalists are creating funds devoted entirely to investing in Facebook tools. Lance Tokuda, chief executive of RockYou, said the price would be high for anyone who wanted to buy his 20-person company’s most popular Facebook widget, Super Wall. “If you told me you were going to write me a cheque for $US 10 million, I’d say, ‘Forget it,” he said.

The Australian Financial Review, 9/10/2007, p. 39

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