A little over a year ago Facebook opened up their platform and announced an environment free for all developers to come and build on as well as monetize. One year later Facebook is at a crossroads and it appears that they are toning down the free for all mentality that they initially embraced. Numerous companies have built monetization systems on top of the platform and Facebook now finds itself competing with many of them.
In theory and open platform is best for all, especially the consumer but few if any purely open platforms have ever been built into sizable businesses. Microsoft was never shy about involving itself in protectionist measures to promote their own software. Facebook now faces a similar dilemma. It’s clear that their new design is going to negatively impact many of the applications on the platform. Such a substantial redesign of the profile is an almost unprecedented move in an ecosystem with rapidly growing businesses.
At the Graphing Social Patterns East conference two weeks ago, I posed a question to a panel of Facebook executives which essentially boiled down to if Facebook is safe for business. Ultimately I received a non-response from a team of media trained employees. The question still stands and it appears that Facebook is still figuring it out. According to a few insiders, Facebook is regretting some of their open door policies as they learn that large brands have developed large marketing campaigns on Facebook with 3rd parties rather than approach Facebook directly.
In theory though, the focus needs to continue on perfecting the platform. I also have a feeling that we will see this focus continue when Facebook makes their announcements at next month’s F8 event. This focus shines through when sales representatives from Facebook are pitching large agencies. As one agency represent put it, “Facebook and MySpace’s sales pitches are distinctly different. MySpace’s pitch focused on how their platform benefits advertisers. Facebook’s pitch focused on how their platform benefits users.”
As Facebook is subjected to increasing pressure to generate revenue, the company is going to face tough decisions. One of which is how friendly they will act toward companies that have built businesses on their platform. As far as I’m concerned, this may very well be the most important decision for Facebook. Competing platforms have the luxury of determining how restrictive their policies will be.
Facebook on the other hand, has clearly stated that their platform is open for all to compete. While they didn’t proclaim that it would be fair for all to compete, it’s clear that they are now in the precarious situation of changing the platform environment and potentially reconsidering what was once a completely open-door policy.


2 Comments »













At first I was dreading it, but now it makes sense to pay a platform fee as a developer, then maybe FB would feel some obligation towards the developers/entrepreneurs who have built businesses on the platform, though it really amounts to nothing more than a kickback (they’re already getting free development!). Heck the money could be earmarked for developer customer service (still waiting on that…)!
One way to do this would be to charge a percentage of monthly rev., though tracking all the various rev. streams any single application can employ would be difficult if not impossible.
At first I was dreading it, but now it makes sense to pay a platform fee as a developer, then maybe FB would feel some obligation towards the developers/entrepreneurs who have built businesses on the platform, though it really amounts to nothing more than a kickback (they’re already getting free development!). Heck the money could be earmarked for developer customer service (still waiting on that…)!
One way to do this would be to charge a percentage of monthly rev., though tracking all the various rev. streams any single application can employ would be difficult if not impossible.