Facebook is launching its “Verified Apps” program today. The program was first announced over the summer at their F8 Developer Conference – Third party applications will be segmented into “Great Apps” (currently reserved for iLike and Causes), “Verified Apps” (trusted apps, just not the best of the best), and everything else.
Facebook says they expect at least 10% of the 48,000 applications currently available to eventually become Verified Apps, although they won’t speculate beyond that. Apps that get the Verified designation will be given a special badge to place on the application, designation on the application directory, plus a few other bonuses like advertising credits and easier rules on how many notifications, emails and invitations they can send out to users.
The guidelines for acceptance are here, and consist primarily of proving that they are “trustworthy.” This is determined based on how secure, respectful and transparent the apps are:
Secure: Protects user data and honors privacy choices for everyone across the social graph. Facebook users are deliberate and specific about which data they choose to share, how they share it, and with whom. All applications must respect users’ choices and the choices of their friends by only accessing, using and sharing data users have explicitly allowed. Users put their trust in Facebook, our Platform and your applications. This trust enables us to provide with social information for your applications. So it is up to all of us to earn and maintain user trust.
Respectful: Values user attention and honors their intentions in communications and actions. Users trust that when they use your application, you will represent their intent and best interests, especially the messages you send about them or on their behalf. The more control you give them over how you represent them, the more likely they are to trust your application and want to use it more. Make sure to also value users’ time by employing proper communication channels and neither spamming users, nor encouraging them to become spammers.
Transparent: Explains how features will work and how they won’t work, especially in triggering user-to-user communications. Nothing is more frustrating than to click a button expecting one thing to happen and having something entirely different and confusing happen instead. Even worse is sending communications to a user’s friends that the user did not intend or want to send. This can undermine a user’s personal relationships and deters users from freely communicating on Facebook and through applications. The best applications are clear about their features and don’t try to deceive users.
Developers can apply now for the program, and will be slotted for a much longer application process at a later date. Once all apps are reviewed the program will go live, sometime early next year.
This Will Be A Serious Revenue Machine For Facebook.
There’s just one catch – developers must pay a $375 to “cover some of the operational costs of the program.” If every application applied, that would be $18 million in incremental revenue to Facebook. Our guess is half or more will apply. Certifications are good for one year, so this revenue is recurring.
Developers are given three chances to get approval (with feedback along the way). If they fail after the third attempt, they can re-apply 3-6 months down the road.
It’s only 18 million though. They need a better business model.
they need to verify users, too.
mike….
where’s your slam in jerry yang stepping down from yahoo!!!
peace!
But still a pertty good business model. Additional revenue stream.
Jack it up to $10,000 incrementally over time, the revenue will reach in the hundreds of millions.
Then charge the users to use the app like $0.25 per minute of use. This can make Facebook in the billions. Developer can get $0.08 per minute from the charge.
I’m going to assume that’s a joke. Anybody who thinks adding per minute charges or charging users at all for social network functionality beyond “customization”, “ads-free” or “gifts” and still maintain a place as a desirable social network… well let’s just say I have a sweet deal on sub prime mortgages to sell you.
$0.25 per minute!?! You must be dreaming. Name one Facebook app anyone would pay a red cent to use???
I was at f8 and my impression was a lot of this was to weed out apps that weren’t behaving like a potential FB buyer would fine acceptable – at least that was the vibe that I got.
So, i guess Slide has enough money in the bank to get an entirely new business model?
slides reach has halved past six months…..
$375 is stupid…should have been $990
I think they should charge $4,985 per app. Developers can afford it.
Give it a rest buddy… some app developers have maxed out CC and debt just to make there dreams come true…
If developer can afford to pay $500 per month in rent, they can afford to pay at least $4,985 per year.
$6,000 in rent a year vs $4,985 a year. I choose to go with facebook and not have an office.
Developer can afford it.
I’ve developed a few apps for Facebook, but they’re not businesses for me. They’re simple little utilities, nothing more. I’m not going to make them verified, since it really doesn’t benefit me the way I want (I don’t care about how many people use it, just that it’s useful to them).
Saying half of all apps will apply is extremely optimistic. A large number of them are abandoned, small pet projects, or are run by people who don’t have money to blow on something that’s not really going to affect their app. Facebook’s 10% might even be overly optimistic.
My company developed a Facebook app, and we are basically regretting it. The changes in the last couple of months on Facebook (no apps on Profile page, etc) have buried Apps. Now asking us to pay $375 to be “verified” is adding insult to injury. And just what does “verified” mean anyway? That the app is “secure”? Are we to infer that Facebook is currently approving apps that aren’t secure? That they will only bother to check for security issues on their platform if you pay $375? ABSURD.
I see VERY few apps that have any kind of revenue model. If Facebook itself can’t sell advertising more lucrative than Acai Berries and Rolling Razors, I find it hard to believe that Apps are generating ad revenue for developers. Zuckerberg and Co. must be really scrapping the bottom of the barrel to come up with this hair-brained revenue model.
great. i hope speeddate goes to hell. the litmus test will be this: Will they approve speed date? Completely evil apps
agreed, I get thousands of speeddate emails/notifications per day and there’s no way to stop it!!!! I stopped using facebook because of speeddate
what is the “helleva revenue model” – if half uptake, $9M. This is chump change in their cost model and it really will cost them labor and ops to do the scrubbing.
Agreed…seriously doubt that they’ll see hardly any direct profit from this. Way to be sensational, Mike.
where I come from $9 million is a lot of money.
If you were a real businessman you would spend that much on your toilet.
yes, well, ok.
And going through 4800 apps with a fine-toothed comb requires a lot of money.
Michael – I completely disagree with your statement that half or more of the applications will apply. Some companies churn out 100’s of applications…I cannot see them spending $40K-80K to certify their applications. I also can’t picture the hobbyists paying $375 to verify their application. My guess is that they get 1,000 applications, if that. That’s $375,000. Also, isn’t this a one-time thing and not an annual fee?
it is a one time fee I believe. They’d be relying on new apps for additional fees.
I think they’ll change it to an annual fee because app will change and they can become non-verified after verified status.
what they’re charging will barely pay for the people time involved in vetting these apps…
Applications must be recertified every twelve months.
See http://develope...erification.php section The Process subsection Post-Verification bullet-point #3: “Verification will expire at the end of twelve months, and your application will need to be re-reviewed to maintain verified status. … At that point you will need to submit another verification fee”
I think it just shows the desperate pressure to generate cash that Facebook is under. All this will do is give them a one time payment of a few million. Then seriously reduce the number of apps. Don’t see much of an upside in clamping down on the the only system that is trying to develop a revenue model that works for FB. It essentially becomes a tax on any innovation that might occur on FB. Seems like there is no one in management over there that has an appreciation of the economic way of thinking, which is really important for managing an ecosystem. Seems like more of the same Stalinist management style over there. Looks good on paper.
Its an annual fee, the app has to be re-verified each year.
Also others have made mention of the human costs in verification – for the verification that FB is doing you could off shore this to the Phillipines (or elsewhere) for a lot less than $30.
wow, you guys are right, this is an annual fee. awesome for fb.
Facebook’s appeal as an application platform was sabotaged by the new Facebook designs “Boxes” page. I uninstalled 7 of the eight applications I had installed.
think of this as ebay listing promotion fee . . .
Until Facebook can come up with a way to provide a revenue stream back to the developers (like the iPhone App Store does), serious developers are going to continue to stay away. Now, if FB introduces a policy where they roll out a revenue model only to “Verified Apps”, then they might be on to something. I agree that the $9MM bones isn’t chump change, but my guess this as much a perception play to win back the serious devs who jumped to ship when distribution platforms with real revenue potential came along.
I think this is an awesome program, but not yet a huge revenue model. I highly doubt that half will register for this. I am willing to bet that only about 3000-5000 will actually register.
They should let these verified apps be purchasable, or ad supported. Both ways should share revenues with the developer.
I doubt it’s a profit center unless it’s 100% automated which sounds unlikely. $375 doesn’t go far if you need to have human beings involved. Salesforce AppExchange certification is $5,000 and I highly doubt it’s a profit center given the rigor of the certification process there (and the human/employee costs related thereto).
Why aren’t people smart enough to realise that when you sign up for FB and all of those moronic “create a zombie army” and other “pokes” shit you are actually whoring your personal information?
Good thing so many people are sheep, because as long as they continue to flock mindlessly to such offerings, there will always be lots of shepherds around to gather them up into a herd and suck every bit of value out of them.
Come to think of it, “whoring” is the wrong word because whores get paid. People are giving away their personal information like a nympho gives away sex.
Talk about a bait & switch. In other words, feel free to develop apps for our platform. Pay a premium for “verified” recognition. If your app is good enough, we’ll create a native alternative for Facebook users, thus rendering your app obsolete.
Wow.
You shut your mouth. Don’t like it, go create another facebook.
What a well-thought and reasoned response to chris’s comment. I have a sub-prime mortgage on a really nice waterfront property in New Orleans for you to buy, since you obviously know a great deal when you see one.
I totally agree with chris — it’s like FB is a poacher, waiting for someone else to develop something good only to copy it and force the original developer out. Some business model, eh?
Methinks Facebook should take a crash course in tollbooth management from Meister Steve himself.
I agree with jason, and disagree with the characterization of the verification being ‘incremental revenue’. Incremental revenue would mean they have an automated process already built, and that $375 goes directly into facebook’s pocket (this assumes my understanding of incremental revenue is correct).
More likely, as Jason points out (and facebook for that matter, who you quoted as saying the money will “cover some of the operational costs of the program.”) they’ll need to be paying a team in order to do this verification. Granted, probably not a team sucking in $9 million, but still.
they should charge developers to develop period.
Maybe Facebook should acquire Yahoo?
No need to over analyze this one. I think they _should_ pursue this as an experiment, which will yield them some insight as to the price elasticity of developers (at least when compared to “free”). Over time they can do more clever things that yield them higher rents from developers, but at least they would have verified whether or not developers who look to gain fame/fortune are willing to put some dollars for accrediation (HOw is this different than cerified microsoft people).
But, I think the real money maker here is… not ads (yet)… but subscription fees (as has been suggested in prior posts), or some type of premium sub service.
100+ million users * $10 (or higher) / year = a lot of money.
Say 10% of users go for it, that’s still $100 million per year at that low price point. That’s:
- 5 iphone appstore apps (what’s the average # of apps per user) assuming $1.99 per app.
- less than one month of netflix membership
- less 5 iTunes movies
- 1 movie ticket
Yes, it’s a US centric view, so for those of you saying it’s a lot of money abroad, it’s the price of 2 of 3 meals from a thai street vendor. And it is likely that much of FB’s base belongs to the “have’s” not the”have nots” abroad (think international school kids, expats, middle class etc). E.g. they can part with that money (assuming the payments can be collected), since they are likley paying a lot more for their mobile phone.
With this model the utility/value is huge. It would not surprise me if they go that route.
Probably the best way to do it is to introduce it as a premium service tied to one or more valuable resources that people are currently free loading on (# of status updates, # of photos, maybe even # of friends).
So net net, i think it’s a good idea to experiment with this, but we should all brace ourselves for something much bigger depending on how this experiment goes.
Apple’s appstore is a profit center b/c it offers utility on a mobile platform, which is a pretty unclaimed space at the moment. Facebook can’t charge users for app use on their platform b/c it goes against their whole product: give users a strong communication network and sell their data to advertisers. However, I think there is potential for FB to sell a mobile app in Apple’s, MSFT’s and Android’s app market. They have done a great job on their mobile app across platforms and with 120 mil active users, a $10 app fee would add up quite nicely.
More exposure for verified apps would make this deal “sweet”. Perhaps a listing in a tab in their Application Directory
I love facebook apps as-is, but the mere fact that some of these apps will become “VERIFIED” just makes this sweeter! Good job to FaceBook!
Also, if you’re interested in facebook apps, feel to to check out this application a buddy of mine created:
http://apps.fac...k.com/vingtalk/
It’s for a new mobile start-up called VingTalk. Check them out at:
http://www.vingtalk.com/cpp
Weak!!! I am not impressed.
They will not even generate the $18m
…and the struggles continue
Where’s the e-commerce support for f***’s sake? Tards.
Mmm, Kool-Aid.
There is absolutely no reason to believe that Facebook’s estimation of uptake (10%+ of apps) is conservative by a factor of five (compared to Arrington’s 50%+). A company’s estimate of its own revenue potential would normally tend towards optimism, not pessimism. And as many point out, most apps are hobbyist or insignificant apps that their owners won’t see value in paying to verify.
And if that’s not enough, this comes the day after Facebook swallowed the birthday alerts apps. Great timing. For your $375 you don’t get a guarantee that Facebook won’t destroy any chance you have of making it back. So paying the $375 stops being a hefty cost that may benefit a minority of significant apps, and starts to look like an act of outright insanity.
And (also already pointed out) it’s not incremental revenue because Facebook’s own statement says that at least some of the fee goes to cover the operational costs of checking the apps. Arrington nonetheless manages to call it “incremental revenue” in the same sentence as he quotes the part about operational costs. Well done.
So there’s no reason to think that Facebook’s own estimate of $1.8m is too low. Not all of that will go to the bottom line, and whatever’s left after paying people to check the apps is clearly not going to dent their server budget.
This is a perfectly valid way of ensuring some quality control, although the timing is still bad. But it’s not a revenue model.
I’m afraid Sam is right on this one. There is no way that 25,000 apps will be ponying up $375 for verification. However, I believe Rose is also right… Facebook should charge more.
The developers who are actually willing/able to pay $375 would certainly willing/able to pay much more based on the benefits.
I’m surprised you’re the first to point out that .1 * 48000 * $375 = 1.8M not 18M. This will do very little for Facebook’s bottom line even if most apps do apply for the program.
Just goes to show that there’s potentially tons of different ways Facebook will be able to monetize. The other side is that every time you try to monetize you create more opportunities for your competition.
if they charge more, only a handful of developers will get verified, and this will reduce the number of verified apps. the whole point of this is to make the business look attractive (show high number of verified apps) so that someone can come in a put their flag on it. if google is getting hit by the slowdown with less ad revenue, i can imagine that fb is probably getting hit even harder.
Bait an switch for sure. Why would anyone invest a penny in an app that if successful will most certainly be created by facebook themselves, especially when facebook has already done this countless times in the past. No respect for developers…facebook is truly the evilest of companies.
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