Facebook Feels the Pinch and Decides to Make More Money

Posted by Mashable in Wednesday, November 19th 2008

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Two bits of interesting news on the Facebook front this evening. Nick O’Neill at All Facebook noticed that the social network has created additional ad inventory for sale on their sidebar, and we received details on the Application Verification Program that was announced earlier this week.

Both signal a move by Facebook to get serious about utilizing as much of their highly used social network to bring the company closer to profitability.

Platform Reloaded: What Does That Mean?

Facebook gave us some information on what they meant when they issued their statement of guiding principles for developers to get their apps verified, which they later copied out to the developer blog. Adam Ostrow more or less pegged the gist of it when he wrote up the news Monday:

“So what does it take to get your application verified? Facebook has published 10 “Guiding Principles,” with the central themes being that apps should be “Meaningful,” “Trustworthy,” and “Well-Designed.” It also takes $375…”

“Essentially, coupled with the current fbFund finalists, Facebook is resurrecting the platform, which has been largely hidden to passive users (folks who ignore the apps completely) since the social network rolled out its redesign. It’s all been very methodical – first, bury the applications under a special tab on user profiles, then, dole out funding to the best app developers, and finally, offer everyone else a way to get their apps back in the game.”

In their missive today, they clarified that you don’t need to be verified to exist on the platform (you know, the one that almost no one goes to since it’s been hidden by the re-design), but it will “encourage users who might have been hesitant before to now try these applications.”

This very closely mirrors the somewhat controversial setup that MySpace has in place with its application platform - just about anyone can design and implement an app on MySpace/OpenSocial. The ones that pony up to be featured developers, though, are the ones with the monster pageviews.

Facebook Wants to Sell to You

In another move that some might describe as MySpace-ish, they’re increasing the amount of advertisements seen on every page. As of Tuesday afternoon, spotted in the wild were displays of a three-ad setup (seen to the right), instead of the normal two ad setup.

They’ve been steadily increasing number, presumably to keep pace with the ever increasing average page-length, and the number might be variable (since some reports still say that certain users only see one ad on most pages).

Nick O’Neill puts it in context with some other recent Facebook monetization moves:

The company has been doing an increasing number of ad tests over the past couple months including the addition of video ads which have shown up on the homepage with increasing regularity. It’s a small change but it has the potential to boost their revenue.

While it might sound slightly critical to continually compare some of these moves to “sounding like something MySpace would do,” in reality, it might be the smartest move for Facebook. Between the two, Facebook might be growing quicker and have a much more impressive valuation.

On the other hand, though, MySpace is the social network that’s in the black (and has been there for quite a while).

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