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Facebook Developers Fighting For Scraps

Facebook's developer platform is barely 11 months old, but the burgeoning developer ecosystem it's created faces many challenges ahead, a group of developers said at the Web 2.0 Expo on Wednesday. For starters, there's the question of money: How big is the Facebook platform pie? How big can it get? One exec estimated that more than $100 million would be made in 2008, while others said revenues would be as low as $10-35 million. All the panelists agreed that Facebook CPMs are "miserably low," averaging maybe 15 cents. Approximately 80% of the platform's revenue comes from advertising, but developers are also exploring the sale of goods and premium services.

Another big gripe was Facebook's recent moves to block viral distribution channels. Apps like FunWall depend on users sending friends automated download invitations for distribution, as it's clear that most users won't invite them proactively. One developer said that in the long run, more engaging apps like Scrabulous are the only ones that will survive, because they attract more dedicated users and provide better opportunities for monetization. "Everyone else is kinda screwed," he said.

Because of the lack of real money flowing over it, developers said the Facebook platform would continue to be more attractive for independent developers rather than large companies, because of the difficulty of monetizing and maintaining a strong user base. That said, independent developers may also struggle, as they typically don't crank out highly engaging apps.

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