Facebook is a famously difficult place to make money. Despite the popularity of the social network, most ads go for pennies per thousand impressions (CPMs). Even Social Media, a Facebook ad network that is able to get effective CPMs of about 50 cents, has only paid out a little more than $8 million total to application developers since it launched a year ago. Yet AllFacebook claims:

There’s a pretty well known secret among top Facebook application developers: one developer is generating over $1 million a month. Who is that developer exactly? Well, most people won’t talk about it and after some prodding around we’ve narrowed down the suspects. We aren’t going to post them though because ultimately it doesn’t matter who the individual is.

Excuse me? Actually, it does matter who this mystery million-dollar-a-month Facebook developer is. Facebook apps that make real money are few and far between. It is important for anyone creating such apps to know which models work and which ones don’t. Nick O’Neil at AllFacebook should understand why his readers would want that information, even if his sources would rather that he keep it to himself. It is also important to know who it is in order to try to test the claim.

As it so happens, I’ve heard this million-dollar-a-month claim before. It came from Anu Shukla, the CEO of Offerpal Media, a lead generation network for Facebook apps that gives users a way to earn virtual currency by looking at an ad and completing an action (such as filling out a registration form). O’Neil also points to Offerpal in his post, noting that it can generate average CPMs of $75, with some as high as $200,

When I interviewed Shukla earlier this summer, she told me that about 200 apps on Facebook and elsewhere are tying their virtual currency to Offerpal and that “there are publishers earning up to $1 million a month with a single app.” She also said that 80 percent of the top 25 apps on Facebook are using Offerpal.

Friends For Sale! is one of them. This app lets you “buy and sell your friends as pets” and includes a virtual gift shop as well. It boasts 4.5 million monthly active users, making it one of the biggest apps on Facebook.

Could it be the million-dollar app? I don’t know for sure (Shukla wouldn’t say—if you have a better guess tell me why in comments). But let’s run some numbers and see if it makes sense. While Offerpal’s CPMs are high, Shukla said that only a small fraction of any given app’s users—typically only 5 to 10 percent of active users—will look at Offerpal’s CPA ads.

So let’s be generous here and assume that 10 percent of the people who play with Friends for Sale engage with an Offerpal ad (450,000). Let’s give it a $100 CPM and multiply that by a generous ten pageviews per month per user. That would be 450,000 X $100/1,000 X 10 = $450,000. You’d have to really stretch that to get to $1 million a month. But a $200 CPM or more than 20 pageviews per month would get you close. So would expanding Offerpal’s reach to a larger percentage of the app’s active users (after all, the whole point of the app is to buy and sell “pet” friends and virtual gifts).

That’s within the realm of possibility. Just barely. I guess some people will do anything for money, even if it’s not real.

Of the 200 social networking apps that tap into the Offerpal network, Shukla told me the median app was collecting $150,000 a month in revenues. That suggests that Offerpal is paying out more per month to developers than the $8 million Social Media has paid out over the past year.

It also suggests that creating a virtual economy inside Facebook could be more lucrative than plastering it with generic ads.

Update: Another strong contender for the million-dollar app is Mob Wars (2.5 million active monthly users, we’ve heard from several sources, as has VentureBeat, which explains:

In the game, a would-be mafioso starts off as a petty thief and must work his way to the top of the crime chain, earning points by fighting opposing gangsters, doing jobs, robbing stores and casinos and exploiting underlings. The player can improve his character by spending these points on better guns, real estate, loyalty and more, and while he could spend an eternity building up enough points to become a serious baller, he can also spend real cash to jumpstart the process.

Who says crime doesn’t pay?

Less than a year ago Alex Le and Siqi Chen were working at one of the web’s most ambitious startups, semantic search engine PowerSet (Due out soon). But last December they made the tough choice to quit it all and go full time for their own side project, a quickly growing little Facebook application called “Friends For Sale”. That project has grown into a full blown venture backed startup ironically named “Serious Business“, which just raised $4 million from Lightspeed Venture Partners (double digit pre) and currently draws over 600,000 daily active users on Facebook. Steve Newcomb, formerly of PowerSet, will be taking a seat on their board.

True to its name, “Friends for Sale” is an application that lets you virtually buy and sell your friends. The game is an ego driven form of “poking” (virtual nudges) that makes it abundantly clear who the most desirable players are, by listing a leader board of your most expensive friends. Every one of your friends, whether they have the app or not, can be purchased as a “pet”. Everyone starts at a base price that rises with every resale. You get more cash when you log in, are sold, or have one of your pets bought away from you. Users can spend that cash on kicking their pets, give them funny tag lines, or even virtual gifts.

That one game has also been supporting the growing company’s resources (20 Ruby on Rails servers and growing) through a mix of banner advertisements and sponsorships. While the company declined to state their earnings, they estimated the company could grow to 12 engineers without raising any financing. The financing allows the company to significantly ramp up their expansion plans.

But Lightspeed didn’t invest in Serious Business just for a single game. Founder Alex Le cites “Friends for Sale” as the first in a series of of games built directly around your relationships with friends. The idea is to create games for all social networks (Facebook, OpenSocial) that rely on leveraging social skills to win, instead of your twitch reflex or poker proficiency. While they’ll have some games to announce in the next 30 days, the founders briefly threw out the example of a battle game where your friends are the soldiers and success depended on your social skills.

Serious Business is not without competition. Zynga and SGN are well funded social gaming startups. However, Serious Business has a much larger hit than either, so far. “Friends for Sale” has also already been cloned as “Owned”, which draws about the same level of traffic some days. “Friends for Sale” itself is a variation on an earlier game “Human Gifts”. These startups are also in competition with the cycle that most applications follow on Facebook, amongst other potential difficulties. Applications tend to explode for a brief period (if at all) before settling at a lower activity level or completely dying.

Serious business indeed.