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Hi, I’m Brad Feld, a managing director at the Foundry Group who lives in Boulder, Colorado. I invest in software and Internet companies around the US, run marathons and read a lot.

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The Facebook Problem

Comments (68)

I’ve had an account on Facebook for a while. Until a month ago – around the time of the F8 Platform launch – I checked it once a month.

In the last 30 days, I’ve been checking it once a day.  My friends list has exploded, I’ve added a bunch of apps (just to play around – hint – important reference to a note below), and exercised most of the features that I could find.  VCs and entrepreneurs have “discovered Facebook” – everyone is talking about it on blogs and in pitches (as in “we are going to build a Facebook app for X.”)

A week ago, I started thinking that there was a key problem with Facebook.  This problem is directly linked to the absolute strategic brilliance of the Facebook folks around the launch of the Facebook platform.  This problem is clearly articulated in in the post “I have 250,000 users, now what?”


Be patient – you get to hear the problem in two paragraphs.  Last week, I started saying to people “Facebook is a substitute for television.”  I don’t think I made this up (I’m sure someone else said it first), but for the last decade many people involved in the Internet have been searching for the pure substitute for TV – what will you spend your online time playing with instead of sitting and passively watching TV.  Facebook finally seems to be the tipping point for this.

Granted – Facebook is active, not passive, so it’s theoretically better for the human brain.  However, in my interaction with Facebook, I’m still in “complete playing around mode” – I haven’t been able to derive any real discernible value from any of the hundreds of ancillary applications that are appearing.  Some are just plain silly (but often clever) time wasters; others are just republishing of content or reorganizing capability that I have through some other application.  None of this is the “problem” – but it’s the root cause of it.

The Problem: As of today, Facebook is deriving massive benefit in all the application development that they’ve enabled.  They’ve brilliantly created an open community that allows developers to quickly create applications that can rapidly acquire hundreds of thousands of users.  This dramatically extends the functionality of Facebook by offloading the R&D and feature development to the apps developers.  (How about all of them there adverbs – I sound like a press release.) However, as far as I can tell, none of these Facebook apps developers are deriving any real benefits (if you are a Facebook apps developer and ARE deriving a tangible benefit, other than customer acquisition within the Facebook infrastructure, please weigh in.)  In addition, Facebook has shifted all of the infrastructure costs to these apps developers, creating the “I have 250,000 users, now what?” problem.


It seems like Facebook could easily turn on CPM based ads on all of the Facebook apps pages and do a revenue share with the application developer.  Suddenly, the application developer would get paid for the massive new page views they are getting (as would Facebook), and Facebook would create a real incentive for the publishers to stay with their apps and grow them. 


In the absence of this, Facebook is going to need to address the “value to the apps developer” quickly, before some of the larger apps vaporize due to the developer saying “I’m not willing to keep paying for servers and bandwidth.”  I can think of a couple of other approaches here, including Facebook building an in-the-cloud infrastructure for their developers that they make available to one’s that reach a certain level of popularity.  But – the straight “we’ll make more money and share it with you” seems the most logical approach to me.

  • http://www.billerickson.net Bill Erickson

    A change has happened at Facebook and not many have noticed it. As the VC’s and entrepreneurs have become more connected to facebook, the average user (a college student) has become more disconnected.

    Facebook as a replacement for TV? It was that 2 years ago, it isn’t any more. As a college student and an entrepreneur (like everyone else in the world, I have a facebook app being released next week) I’ve seen the change happen. Last year, whenever we – and by we, I mean college students – were bored, we’d get on facebook and browse around for a while. Check out some photos, browse friends profiles…just bounce around on facebook for an hour or so.

    But now, facebook has added so much stuff that it isn’t an exploring tool anymore – they’ve optimized it to a point where I don’t need to explore. Instead of spending hours jumping around on friends profiles, i can take a quick look at hte news feed. I get text msgs and emails whenever I get a message, tagged in a photo, or any other “actionable” item. I’ve found I only go to facebook now when I need to act on one of these “actionable” items; e.g., receive a message, wall post, tagged in a photo.

    And it’s not just me. I’ve been talking to a lot of college students because I want my facebook app to succeed. It had almost been finished before they released the platform – it originally used the API – but rebuilt it using the platform, which delayed the launch.

    Anyway, almost everyone I’ve talked to has said the facebook apps now are out of hand. One person even said “someone should build a facebook like it used to be, no one wants this new facebook anymore but there’s nothing else that’s better.” Facebook is becoming like digg – too much noise for exploring (ie, TV replacement), but it still works well as a communication platform. So, we are now using it as a replacement for email, IM and the like.

    I’m not saying facebook is going anywhere – it is still the best communications platform out there. It has most of my social network already plugged in and I can’t take that to another service (unless it’s built into facebook). But those 250,000 users your application has, they are mostly the same 250,000 users all the other applications have. The vast majority of students aren’t adding any applications. With the huge stream of options, they just blocked the whole thing out.

    It’s going to be much harder for my application to get critical mass at my university because the majority of people just won’t look at the application – even if it would be extremely useful to them. People have told me they would have loved my service back before the facebook platform, but now it’s just going to get lost in the noise.

    (sorry for the rant)

  • http://newspeedwayboogie.blogspot.com/ Weissman

    F8 reminds me so much of late 90s AOL. The revenue share you propose is indeed similar to the revenue share AOL had with its content providers before all you can eat ISP pricing. And, The Facebook dev platform could be compared to the AOL rainman platform back then too.

    Of course, all you can eat pricing made this economic arrangement impossible and almost all of the early AOL content developers — many small businesses you got comp’ed based on traffic — could no longer survive. But back them the web browser as a platform was not mature, so developing inside AOL’s walled garden was an acceptable approach.

    Were Facebook to recreate this model, would the revenues be enough to sustain all this development? And, further, are the constraints of building an app (apps-lite) for FB too great to sustain long term value with this?

  • http://www.faneuilmedia.com Rick Burnes

    Can’t the developers run their own ads? Is there anything to prevent them from adding AdSense positions to the frames they serve?

    Zach Allia, the Northeastern student who created Free Gifts (2,381,091 users), is having his application hosted by 30 Boxes in exchange for a link in the upper right corner of app’s home page. He’s trying to figure out how to do more advertising.

  • http://www.BookMesh.com Brandon Mullins

    Brad -

    What are your thoughts on an independent entity being formed whose sole purpose is to acquire multiple top-rated Facebook applications, forming a “Facebook App Conglomerate”?

    I am sure that quite a few of the independent developers who have created these applications, and who are bearing the costs of their growing user base, would be happy to sell their creations. Thus, this “Facebook App Conglomerate” would operate multiple applications spawning millions of users, which could result in efficiency when attempting to monetize these users (ad model?).

    I am curious as to your thoughts on such an idea formulating into a viable, monetizable, and profitable business.

  • http://www.feld.com Brad Feld

    @Rick: Depends on the page placement given the limitations on Javascript. In addition, the Google ads are going to be CPC – the small add-ins will probably do a lot better with CPM based ads.

    @Brandon: The conglomerator is – um – Facebook. If they aren’t thinking that way, someone should smack someone over the head. I’m sure a Facebook App Conglomerate will emerge (and expect at least one VC will fund one) – when the 7th emerges, you know we are hosed.

  • http://www.defragcon.com eric norlin
  • http://www.feld.com Brad Feld

    an anonymous comment:

    I guess I still don’t see the problem. Facebook has been around for about 4 years now, and they’ve had their application platform for a month. The applications provide a medium for publishers use for whatever they want, but whether or not these guys put out new applications or even continue hosting the current ones, facebook will be fine. They are trying to please their users, not their publishers. Does Mozilla revenue share with publishers of their Firefox add-ins? It seems to me that it is the publishers’ problem to figure out how to monetize their users, not facebook’s. Also, when facebook made the application platform, I don’t think they expected it to blow up this big. They were just looking for new perks for their users, like attaching music or videos to a profile, in order to better compete with myspace, and it would be okay with them if it reverted back to that.

  • http://www.newscloud.com Jeff

    I developed the NewsCloud application and the Daily Show News application on Facebook.

    I haven’t turned on ads but I have tested and confirmed the ability exists to add your own adsense or other ads via iFrames.

    I mostly built the apps for long term customer acquisition.

  • http://www.newscloud.com Jeff

    If I could also add …

    There are now 800+ applications in Facebook and Facebook is now limiting invitations for apps to ten per user per app per day.

    So, the days of 1M+ users in one week are over.

    The days of being the first app provider are nearing the end.

    I agree with the post that only deeper more complex apps will add value to the platform over time.

    Here are links to my two apps
    Daily Show News
    http://www.facebook.com/apps/application.php?id=2417657927

    NewsCloud
    http://www.facebook.com/apps/application.php?id=2366953907

    Open source code for the NC app is here
    http://blog.newscloud.com/2007/06/newscloud_faceb.html

  • Easton

    If an existing company were to acquire a specific and relative Facebook application in order to build an additional user base for their business, how do you feel the user acquisition cost and valuation could be determined?

  • http://irish.typepad.com/irisheyes/2007/06/facebook-tracti.html Bernard Goldbach

    I hear what you’re saying but the composite newsfeed on my Facebook page shows friends who try and discard applications several times a week. Who has time or patience for dozens of widgets pumping in all sorts of content? With 120 friends porting all their lifestreams into a combined newsfeed on my page, I’d have to use more than half a cup of coffee to blow through their musings. That’s not my cup of pleasure. I think the pleasure comes in knowing Facebook is delivering some quality nuggets in one space in fewer than three page scrolls.

  • http://blog.snipperoo.com Ivan Pope

    Friends don’t ask friends to be friends.
    You can be a Social Hermit on Facebook (group) or http://hermits.ning.com
    Take a breather, step back, be alone together.

  • http://www.feld.com Brad Feld

    @Easton: No real clue.

  • willliam

    Face book is a silo. Silos do not work on the internet. History has already show this with what happend to AOL, Lycos, Excite, etc

  • Steve Kane

    Plus ca change…?

    The problem you describe is just what happened with the web 1.0 “social networking” leaders GeoCities, Tripod, et. al. — the burnout/churn of users who lose enthusiasm for the loads of work and resources needed to maintain a web site/app; the annoyance of everyone as a simple clean interafce twists into unusability in attempts to monetize; the inherent conflict between those who support and pay for the enormous infrastructure and their need to monetize versus the anti-commercialism pathos of the web user.

    Anybody remember the uproar when GeoCities put ads on users’ pages?

    Anybody remember GeoCities?

    Facebook is facing/will face similar stresses when it either brings in-house the support for third party apps (the cost and pain of which will drive them to enforce/restrict/control the apps in ways that will piss off everybody) or else reverses itself and closes off the facebook api. its only a matter of time.

    unless, of course, papa google or papa newscorp or papa cbs comes in and buys facebook and, as they did with youtube, myspace and last.fm, says “big losses? spiraling costs with no business model? cool!”

    the pressure on jerry yang to do some transformative-looking deal and acquire facebook must be overwhelming around now. it will be fascinating to see whether that brilliant thoughtful man — who signed off on the $4.3BN GeoCities deal, and so best understands the fickle value of such web properties — will do a similar deal again.

  • http://mrshl.vox.com mrshl

    The average college kid might have app fatigue or he might pine for the old facebook, but if they leave they won’t be gone for long. Most college kids who grew up with Facebook have built a network they can’t easily replicate. Maybe they have a similar one at Myspace, but I’ve not seen reasonable people argue that Myspace is better than Facebook at its worst.

    Remember “Day Without Facebook”? When Facebook users en masse revolted because the news feed / mini-feed? The numbers indicate that just about all those kids came back when they figured out that Facebook has sophisticated granular privacy controls that are hella easy to use. They could recreate their “old” Facebook with ease. But I’m betting most of those who protested didn’t get rid of their feeds. Instead, they have probably come to depend on those feeds. The explosion in apps (e.g., 4 million new users for iLike) indicates that the feeds are the engine of all that viral growth that’s happened in the last month.

    Today the privacy controls are even better. And there’s going to be a shakeout amongst the apps in which the strongest survive and weakest ideas get lost. The current app craze will slow down and gain focus, and the features will be more compelling. And oh yeah, Facebook and developers are going to make money. All they need is just a little patience.

  • http://www.tylerhwillis.com Tyler Willis

    Brad:

    Good points, and something that has given me a lot to think about. I have a larger thought up on “The Facebook Problem” on my blog, but that’s far to long to post here. What might be the converse to your “problem,” it’s not much more than pure customer acquisition, but I would assume iLike is happy with the results they’ve achieved. Of their just over 6m total users in 8 mo. More than 4m have come in the last month, most from their facebook application.

    From Ali Partovi (iLike CEO), in an interview on onlinefandom.com, in response to whether he’s OK with users going to facebook instead of his site.

    “And fortunately, in contrast to the precariously-balanced

  • http://www.tylerhwillis.com Tyler Willis

    @william: Silos have been proven not to work historically only when they control all the data. With the advent of widgets there is benefit for a “summary site” which you and I may consider a blog or a personal website. This site gives us an opportunity to define ourselves online, post content, and bring content out of services, through widgets, to aid our definition.

    Facebook Pages with these new applications just gave the vast majority of people without blogs or personal websites the ability to offer this definition of themselves. I think that’s a sincere offer that delivers value, and it’s one worth paying attention to.

  • kip

    Great post.
    Face book needs to break down the widgets and their user base into core components. You could have 4 or differnt subscription model of widgets so as not to overload users and to still have a decent rev stream coming in.

    Its great to have college kids loving the site but they don’t buy jack compared to soccer moms. When that happens then this is will really be a huge tipping point for the site. Additionally, from a usability stnadopoint, I wan to go from zero to near expert in no more that 10 minutes of using a site.

  • http://www.kinlane.com Kin Lane

    The one thing I notice about the facebook explosion is the number of people compelled to state how overblown the hype is.

    It is a great measurement of a platform or technologies success when you have a bunch of users stating how wrong it or what a failure it is.

    Facebook and its uses has yet to be realized.

  • http://www.cavenger.com Mike

    Absolutely. I joined facebook so that I could keep in touch with my friends back home and all of the friends that I have. I didn’t join facebook to add 3,334 applications to be added to my page. It’s okay to offer some, but at some point, it’s just too much. It’s too cluttered, it’s just too much. Which is precisely why I don’t – and wouldn’t use MySpace. Facebook’s competitive edge, among other things was a simply and clean design.

  • http://knightlynews.wordpress.com John Knight

    I will agree with you on this one. —> [ the straight

  • http://www.southboard.com Jeremy Herbel

    I think that you do have a good idea with the sharing of revenue approach, but that still doesn’t take away from the fact that developers should not be relying on Facebook to make their money for them. In fact, the developer has the ability to stick some sort of CPM ads in their program and take all of the money earned instead of just a share. I think that Facebook is probably going for a hands off approach, and just letting everything fall on the developer.

    I responded to your comment on my site as well, but since I didn’t know if you’d return I thought I’d post here. And perhaps “wrong” would be a better word than “idiot.”

  • Marshall

    What if I was a ring tone A&R who wanted to get my artists ring tones on facebook, who, what and how would I do it?

  • http://www.daxell.net bob julius onggo

    that's the dark side of facebook.
    that creates a fatique phenomenon,

  • http://intensedebate.com/people/RohitK RohitK

    Facebook has done a lot a change these days..it is good enough to build frnds…still some problem is there but still it is the best…..

  • http://toostep.com/ RohitK

    Facebook has done a lot a change these days..it is good enough to build frnds…still some problem is there but still it is the best…..

  • http://www.intensedebate.com/people/RohitK RohitK

    Facebook has done a lot a change these days..it is good enough to build frnds…still some problem is there but still it is the best…..

  • patti nie

    I cant locate my freinds list the site will not open up. I can only open my home page and profile, Ive had several e-mail reagarding on my page but i can open them. What to do? what happened?

    • http://intensedebate.com/people/bfeld Brad Feld

      Sorry – I can’t help you as I’m not Facebook tech support. 

  • Sherron

    I was really enjoying farmtown…It is now the most frustrating game I have ever playing, always getting knocked off and so darned slow….I hope it gets fixed so I can enjoy it again….Right now it is just too frustrating for me and causing me undue stress….Why has the fun been taken away?

    • http://intensedebate.com/people/bfeld Brad Feld

      With massive growth comes the need for lots of new servers!  Be patient – I know they are working hard at making sure their capacity continues to scale up.

  • http://www.facebook.com Iman

    when ever i open my facebook, i go on my friends profile and write something on her wall, and click share it doesnt share,same for my status.i cant even see my inbox messages.when i click become fan of fan pages it doesnt become fan.when i click add friend it doesnt add.

  • http://www.facebook.com Iman

    when ever i open my facebook, i go on my friends profile and write something on her wall, and click share it doesnt share,same for my status.i cant even see my inbox messages.when i click become fan of fan pages it doesnt become fan.when i click add friend it doesnt add.

  • http://www.facebook.com/profile.php?id=683119589 Sezan Mahmud

    reezina khan was my friend at facebook. but, now i cant find her in my friend list. she made sure that she didint block me and neither I. moreover, i cant find her with friend search. her account is active till now. what should i do ??? i need to connect with her. pls help me out..

  • Fella

    Hi, I need help over here!
    well, it's been a week that i 'm trying to sign in to facebook but it says that i can't connect due to a site maintance. Many of my friends had before the same problems but it took them only a few hours and then it was ok… So…Does anyone know how to help me????
    Thank you!

  • ltoomey

    can't sign in to my face book at all,never mind my home page can some one help me. also does facebook have a phone number or a contact site to address these problem's. lt

  • Constance

    i have big problem with my password and still struggle to get open my account for facebook book cuz for long long time i did not use it that is why and i changed my email address already but problem with password. i can't remember old password that is why. They should fix it up!

  • gurjit

    i can’t sign in to my face book at all,never mind my home page can some one help meplzzzz help me….when i login …then it shows the titl bar of my accnt page…bt it don’t show the other cntents…othr info…..plzzzzzz ..tell me how can i accss my acount,,,,it shows …error on page…..
    plzzzzzzzzzz helppp meeeeeeeeee…plzzzzzzzzz

  • gurjit

    i can’t sign in to my face book at all,never mind my home page can some one help meplzzzz help me….when i login …then it shows the titl bar of my accnt page…bt it don’t show the other cntents…othr info…..plzzzzzz ..tell me how can i accss my acount,,,,it shows …error on page…..
    plzzzzzzzzzz helppp meeeeeeeeee…plzzzzzzzzz

  • maria bravo

    i have try to reset my password but i dont received a confirmation password to replace the old one what should i do

  • maria bravo

    i have try to reset my password but i dont received a confirmation password to replace the old one what should i do

  • STACEY

    MY FACE BOOK ACCOUNT HAS BEEN HACKED INTO, HOW CAN I FIX THIS?

  • STACEY

    MY FACE BOOK ACCOUNT HAS BEEN HACKED INTO, HOW CAN I FIX THIS?

  • http://www.facebook.com/jan.hale Jan Hale

    I can't comment, like, check my inbox … just view! HELP!!

  • http://www.facebook.com/jan.hale Jan Hale

    I can't comment, like, check my inbox … just view! HELP!!

    • fatin

      same with me…. very sad……~~~~

  • poo

    I think this is bullshit

  • poo

    I think this is bullshit

  • http://kaks1989@yahoo.com kiran khan

    i can send messages and comments to my facebook friends.i can not confirm friend innvitation,my facebook account is not suporting.please help

  • http://kaks1989@yahoo.com kiran khan

    i can not comment & message to my facebook friends

  • http://kaks1989@yahoo.com kiran khan

    i can send messages and comments to my facebook friends.i can not confirm friend innvitation,my facebook account is not suporting.please help

  • http://kaks1989@yahoo.com kiran khan

    i can not comment & message to my facebook friends

  • http://facebook Connie

    I am unable to comment, get e-mails, comment or accept friends or gifts. What has happened? Please help me to fix the problem. Thanks!

  • http://facebook Connie

    I am unable to comment, get e-mails, comment or accept friends or gifts. What has happened? Please help me to fix the problem. Thanks!

  • fatin

    same with me…. very sad……~~~~

  • http://syabac.student.ipb.ac.id syabac

    sometimes, big social networking in problem..
    twitter, plurk, is too..

  • http://hendrop06.student.ipb.ac.id ndrew

    yupz, hope there's no big problem anymore..

  • http://hendrop06.student.ipb.ac.id ndrew

    yupz, hope there's no big problem anymore..

  • merna

    i can't change my name in the facebook
    i have tried more than once :(

  • CARMEN

    EVERY TIME I GO INTO FACEBOOK THERE IS ALWAY APROBLEM WITH MY PAGE THERE IS DIFREND POST IN THE PAGE. CAN’T TALK TO KNOW ONE AM SUPRISE THAT THIS MESSAGE WENT IN PLEASE TRIED TO FIX THIS PROBLEM THANKSSSSS. I WOULD LIKE TO SHEARE MY OP WITH OTHERS AND COMMENTS.

  • CARMEN

    EVERY TIME I GO INTO FACEBOOK THERE IS ALWAY APROBLEM WITH MY PAGE THERE IS DIFREND POST IN THE PAGE. CAN’T TALK TO KNOW ONE AM SUPRISE THAT THIS MESSAGE WENT IN PLEASE TRIED TO FIX THIS PROBLEM THANKSSSSS. I WOULD LIKE TO SHEARE MY OP WITH OTHERS AND COMMENTS.

  • catlin

    why i can’t open my profile on facebook

    • Anonymous

      i am having the same ploblem with my profile . how did you do it .

  • catlin

    why i can’t open my profile on facebook

  • http://www.facebook.com/jeangaetanalkoordossjazzpiano J. GAETAN ALKKORDOSS

    HI,MY NAME IS = JEAN GAETAN ALKOORDOSS,I HAVE A FACEBOOK ACCOUNT,NOW I CAN OPEN MY FACEBOOK PAGE,PLEASE TELL ME HOW I CAN GET MY ACCOUNT BACK ?? I DID OPEN MY FACEBOOK IN ACCOUNT IN ANOTHER COMPUTER AND I AM BACK AT HOME AND FACEBOOK PAGE WANT NOT TO OPEN,PLEASE HELP ME,THANK YOU

  • http://www.facebook.com/jeangaetanalkoordossjazzpiano J. GAETAN ALKKORDOSS

    HI,MY NAME IS = JEAN GAETAN ALKOORDOSS,I HAVE A FACEBOOK ACCOUNT,NOW I CAN OPEN MY FACEBOOK PAGE,PLEASE TELL ME HOW I CAN GET MY ACCOUNT BACK ?? I DID OPEN MY FACEBOOK IN ACCOUNT IN ANOTHER COMPUTER AND I AM BACK AT HOME AND FACEBOOK PAGE WANT NOT TO OPEN,PLEASE HELP ME,THANK YOU

  • Darrenkay

    i cant go on my profile . it just stays on my home page all the time can anyone help

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