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Summary:

An interesting feature story on Wired News, about the emerging ad networks built on Facebook’s platform, and how their future is heavily rel…

An interesting feature story on Wired News, about the emerging ad networks built on Facebook’s platform, and how their future is heavily reliant on FB’s continued tolerance of them. There are at least eight companies: Lookery, fbExchange, Cubics, Social Media and a new addition, Appfuel. Several widget distributors, including RockYou and Slide, as well as video-solution provider VideoEgg, are in this game as well.

But a few imminent things could spoil this nascent party, as the story points out: Facebook is preparing to do the same thing as these companies, and in a more targeted way. And then, the quest to monetize, fuled by its crazy valution: “While Facebook earned respect for ringing the come-and-get-it dinner bell to developers, that level of benevolence seems incompatible with its $10 billion ambitions and a possible march to IPO, particularly since the company is only pulling in an estimated $30 million in profit on $150 million in annual revenues. A more-targeted ad network, run by Facebook itself, would be one obvious way to increase the cash flow.”

Then a slightly ominous scenario: the data from these newbie ad networks runs through Facebook’s servers, so Facebook can easil learn from their successes and mistakes, and can do so in intimate detail, the story points out.

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  1. "Ominous?" sure, but it's just as true for every Facbook app vendor as it is we ad networks. Mainstream platforms can always choose to learn from (and not directly compensate) their third-party developers. Microsoft, Google, and Apple have done so consistently over the years. Facebook has a more efficient mechanism for doing so, but that's just because they are the first broadband platform.

  2. The only way to not be at the mercy of Facebook's benevolence is to free the Social Graph.

    Some open source projects such as SiloSync are working on making it so users can move their data around… then new developers won't HAVE to build their apps as fb apps just to get access to social connections.

    It's a Brave New World out there

  3. Platform vendors have to behave like Swiss Bankers before you entrust your future to them. Is Facebook Switzerland, or bent on world domination?

    http://smoothspan.wordpress.com/2007/10/01/platform-vendors-have-to-be-switzerland/

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