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Comment by jsjenkins168 | Hacker News Reader

How can one monetize a Facebook app?

I've been thinking about this recently.. If your facebook app does well, then you will pay for it in terms of servers and bandwidth, but where can you make returns?

Unless you can somehow draw traffic to your site through your facebook app I think it might be an uphill battle. I heard reports that iLike actually LOST website traffic after the release of their facebook app.

You are getting some degree of brand recognition but the user base really isnt yours if they never use your product outside the facebook sandbox.

Any thoughts?

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Yes, iLike lost about 70% of their traffic. People now think iLike is just a part of the facebook. They'll be in similar situation as the author of the app discussed in the article.

Problem with monetizing facebook apps is that not even facebook can monetize its users through ads: http://valleywag.com/tech/advertising/facebook-consistently-the-worst-performing-site-242234.php

Maybe virtual gifts/items will help facebook's bottom line? Who knows... but clearly advertising might not be the holy grail.

There's a free gifts facebook app, so no more money from buying gifts.

Advertising is most definitely the holy grail for social networking sites. Just because no one has done it yet doesn't mean it can't be done.

Networks:Social Networks :: Advertising:Social Advertising ?

Networks:Advertising :: Social Networks: Social Advertising?

If not social advertising, then what? What would social advertising look like (and I dont think 'viral advertising' is the complete answer) Perhaps this will be a fruitful thought prompt.

Users with lots of friends (traffic) can be courted by sponsors automatically, and include the advertiser's widgets on their page.

These sites are potentially a goldmine because of the contextual information available, but for the sake of advertisers, popularity/age/sex are probably all that really matter -- I guess you could throw in location, too -- so it could be effectively automated.

I like this idea. It seems cynical enough to work.

You're popular, you have lots of 'friends' ... you're a star! Go sell some Doritos!

Aggregating data to sell to businesses is one bmodel. iLike for instance can probably track statistics on who's listening to what and at what age group and what school, etc.

Surveys could be another model. Present a link to a survey inside the app and companies can target and pay per survey completed.

So, in the case of the map application in the article, he could allow a user to list 0-5 countries for 'free' then if a user wants to add more countries, they would first have to complete a survey for a travel related business.

Alternately he could offer a 'prize trip' to a person who completes X number of surveys.

He could also add a "I want to go here." feature and then send targeted travel deals/information.

He could allow functionality so that a user could link their uploaded pictures to specific places they have been and even offer reviews of their trips that he could compile into a "College Student Created Travel Guide." 'Oh, I see that you are going to be traveling to France, $5 to access 1000 reviews and recommendations." Spring Break comes around, "Here is the Cancun special . . ."

iLike is selling songs and albums. That's a fine business model...

But the apps like the one mentioned in the post.... He could potentially sell targeted travel related advertising, but CTR on travel ads are woefully low unless you are really close to the deal (i.e. someone is searching for "tickets from Seattle to London"). 99% of travel traffic are people who window shopping.

And, of course, if places like iLike REALLY take off, why wouldn't Facebook behave like Microsoft and just build the functionality into the platform? I remember when Netscape Navigator had tremendous market share...

It looks to me like you can place ads on the pages of your Facebook application. If you go to the "Music Challenge" page of the iLike application, you will see banner advertising.

Since the ad is on the application page, I'm guessing that iLike is collecting the revenue for it, not Facebook, but I would love to know for sure...

Does anyone know?

Gigaom though is reporting that at the SF event CEO Mark Zuckerberg said: "you can serve ads on your app pages and keep all the revenue, sell them yourselves or use a network, and process transactions within the site, keeping all the revenue without diverting users off Facebook."

but what about the profile-page widgets?

you can't display ads on the profile pages. they encourage you to display ads on the canvas pages and you keep 100%, although they could change that for certain apps, or all.

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