Facebook Apps : Get Rich Seekers Look Elsewhere?

Posted by Matt on October 4th, 2007

An article this morning in the New York Times paints a negative light on the commonly assumed lucrative environment of Facebook applications.

“Rajat Agarwalla, 26, and his brother Jayant, 21, developers based in Calcutta, created Scrabulous, a popular Facebook adaptation of the word game Scrabble that has been added to more than 840,000 pages. Rajat Agarwalla said he had tried all the Facebook advertising networks and found that none earned much money. Now he is using Google AdSense to put text advertising links on the Scrabulous canvas page, and he said he is barely recouping his swelling bandwidth costs.”

While a quickly coded Scrabble application would probably take up more bandwidth than a common virtual gift Facebook app, this article should serve as a warning for developers and entrepreneurs looking to make it rich on the Facebook platform. For those unfamiliar, Facebook gives app developers 100% of ad revenue generated on their “canvas” pages. These are the pages visited when Facebook users install and interact with their application. Sadly, most of the ads on applications today are ads promoting other Facebook appllications. This is obviously an unsustainable model and there needs to be another form of revenue to support the growing number of Facebook platform developers.

Either way, it looks like the New York Times doesn’t expect to make too much money on its own Facebook App.

Tags: Facebook Apps