2 Years Later, the Facebook App Platform is Still Thriving

In a few weeks, the Facebook application platform will mark its second anniversary. While it garnered lots of press coverage in the months after it launched, the arrival of the iTunes app store shifted attention away from Facebook's vibrant ecosystem. The media glow is understandable: among other things, the younger iTunes platform is adding apps at a much faster rate than Facebook or Myspace.

Games comprise a sizable chunk of app revenues in all three platforms and recent stories suggest that 2009 has been a great year for developers. The substantial revenue generated by popular Facebook (and Myspace) apps has been the subject of articles in VentureBeat, TechCrunch, and Inside Facebook. There have also been recent estimates for the revenue generated by iPhone apps (see here and here). Game developers in particular are benefiting from having a multitude of platforms: Games are the largest iTunes category, and the second largest category in both Facebook and Myspace. In addition, 4 of the top 10 most successful Facebook app providers are Game developers.

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Facebook is Growing Fast in Asia, Europe, and the Middle East

With Facebook recently passing 175 million users, I decided to update my analysis of its user base. The weekly growth in number of users has remained steady, with the last 5 weeks being exceptionally strong: Facebook added over 25 million users since early February. The share of U.S. users inched up slightly from 30% to 31%.

The company added users in all regions but compared to my analysis in early December, growth accelerated in Asia and North America. Note that the number of users in Asia remains small compared to other social networks in the region. The number of users from Canada still exceeds the total in all of Asia (still under 10 million). Within Asia, the fastest-growing countries over the last 12 weeks were Indonesia (up 169%) and the Philippines (up 119%). (For reasons as to how Facebook has expanded in specific countries, I encourage Radar readers to share their thoughts in the comments.)

Europe and South America both experienced double-digit growth rates over the last 12 weeks, but compared to last December, Facebook grew much slower in both regions. A third of all users (33%) now come from Europe. Among the smaller countries in Europe, Facebook grew fastest in the Czech Republic (up 144%) and Slovakia (up 137%). Among the larger European countries, growth was fastest in Italy (up 71%), Spain (up 66%), and Germany (up 48%).

With such a large user base, the company continues to attract application developers to its platform. The number of active Facebook apps continues to grow but at a much slower rate, roughly 2% per week over the last 12 weeks. (For this analysis, I define a Facebook app to be active if it had at least 100 active users.) The graph below compares the relative size of the Facebook, Myspace, and iPhone application platforms:

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Facebook Growth By Country and the Slowdown in App Usage

With the Facebook Developers conference slated for later this week, I thought it would be a good time to give a brief update of a previous post on Facebook demographics. What follows are recently published number of users by country and region, along with growth rates for select regions and countries. Over the last four weeks, the fastest growing regions were South America, Central America and the Carribean:

While Facebook grew double-digits in Asia it did so from a relatively small base (approx. 3.7 million users), in a region with hundreds of millions of potential users. Of the countries in South and Central America, Chile is worth highlighting (up 67.5% from four weeks ago). As several Radar readers predicted, Facebook has grown steadily in Chile where it now has over 2.2 million users (around 14% of the population). In other parts of the Americas, Hi5 and Orkut remain the largest social networks:

Looking closely at the top 30 countries, a few European countries have grown more than ten percent over the last four weeks (France, Spain, Germany, Italy), with France having the most number of users (approx. 2.5 million). Skyrock remains the largest social network in France. Norway saw a decline but is still home to more than a million Facebook users. We will continue to track how Facebook is doing vis-à-vis other leading regional social web sites and whether their disputes with other companies affect their growth rates.

As far as recent trends in the Facebook app platform (the subject of this week's f8 conference), we have detailed reports (here and here) on the subject. At the last Graphing Social Patterns conference, Roger Magoulas provided highlights of our most recent findings. The number of published apps continues to grow steadily (to over 32K) but total usage remains flat. Besides the fact that the top 10% of apps account for 98% of total usage, aspiring Facebook app developers should know that only about 6% of apps average at least 500 active users per day:

(For specific tips on how to launch and build successful Facebook apps, consult this O'Reilly Radar Report.) Finally, as I noted in a previous post, the most popular applications on the Myspace platform continue to account for slightly less users than their Facebook counterparts.

Where Does Facebook Grow From Here

Facebook publishes demographic data through its advertising platform. Potential advertisers can obtain estimates for the number of Facebook users by age group, gender, education, country, and even relationship status! While the estimates most likely rely on user supplied data, they provide the best publicly available numbers on the Facebook user base.

Facebook currently has about 75M users spread across more than 80 countries. The good news is that the top three countries (US,UK,Canada) now account for only about 61% of all users:

A few large (as in population) countries immediately jump out including Turkey, Colombia, and France. Facebook is the top social network in these countries yet the number of Facebook users is small relative to the population. The challenge is that there are more countries on the list where Facebook is up against other more widely used social networks.

According to Alexa, Facebook overtook Myspace as the #1 social networking site on the web. Worldwide numbers are interesting but everyone knows that social networks are best compared on a regional basis. Compare Alexa's recent numbers to the map of regional Social Network Market Share that Tim posted about a month ago. Regional market leaders (Friendster in Southeast Asia, Hi5/Orkut in South Asia and Latin America, Bebo/LiveJournal in parts of Europe) have significant numbers of users and dislodging each of them won't be easy.

What to do in countries with strong incumbent social networks? Incumbency relies on average users aversion to recreating "friendships" and profiles.The ideal come-from-behind strategy is to embrace Data Portability. Or more precisely, as Tim stated last November:

Set the data free! Allow social data mashups. That's what will be the trump card in building the winning social networking platform.

The "our walled garden is better than their walled garden" blueprint works best when you are already one of the established market leaders. The same Data Portability strategy that makes sense for an upstart could be what defines the dominant global social networking platform. Facebook's tussle with Google over Friend Connect shows that they are struggling with this issue. (Also see David Recordon's recent post on Myspace as well.)

Actually, the more probable scenario is that (closed) social networks become less important over the long term. With more web applications incorporating social features, users will gradually "leave" closed social networks altogether. Already, I know less and less people who use Facebook regularly. Most people I know log in only when they receive a "friend" request - sadly hugs, gifts, zombies and pokes are losing their allure.

One other demographic tidbit. Just like the US, the Facebook overseas user base is young, with most users less than 34 years old. Given its roots as a US college social network, Facebook has more college-age (18-25) users in the US. [UPDATE: I also keep hearing that more high schoolers are using Facebook. In the US, the 13-17 age group now account for 1 in 6 users.]

Myspace/Facebook App Platforms & Total Installs

Within a few months, Myspace has quietly built an application platform with over twelve hundred applications. I previously posted a graph for Facebook app categories, in which I compared the categories using the number of active users. Unlike the older Facebook platform, Myspace only provides the number of installs:

It took a few months before Facebook started publishing active usage and I'm hopeful Myspace will follow suit.

At a comparable stage, roughly four months after launch, Facebook already had 4,300 applications. On the other hand, developers should know that the most popular Facebook applications attract a higher share of installs and active usage. After four months, the top 10% most installed Facebook apps accounted for 97% of all installs. The top 20% represented 99% of all installs. The corresponding numbers for Myspace were 91% and 96% respectively. Economists sometimes use the Lorenz Curve to visualize and measure inequality. In both application platforms, the top applications account for most of the installs, with the Myspace platform being slightly less unequal:

[Note: When I drew the preceding curves, I sorted from the most to the least installed applications.] One year after launching their platform, there are now more than 24 thousand Facebook applications! With more than 24K applications, the top 10 & 20 percent Facebook applications still have roughly the same share of total installs.

For more on the Facebook and Myspace platforms, Roger Magoulas of O'Reilly Research will present some of our most recent findings at the upcoming Graphing Social Patterns conference.

MySpace's Data Availability is not Data Portability

Yesterday MySpace, Yahoo!, eBay, Photobucket (also owned by News Corp), and Twitter announced the Data Availability Initiative. While I could write at length about how this shows the big companies have already realized how to diminish the DataPortability group's brand by linking anything they do "data portability," that isn't the point of this post. The crux of the announcement yesterday was that shortly MySpace would begin allowing third-parties to embed MySpace profile information within their own services in the name of "data portability". Unfortunately, the details around this remain buzzword-laden at best.

Their press release yesterday stated:

Additionally, rather than updating information across the Web (e.g. default photo, favorite movies or music) for each site where a user spends time, now a user can update their profile in one place and dynamically share that information with the other sites they care about. MySpace will be rolling out a centralized location within the site that allows users to manage how their content and data is made available to third party sites they have chosen to engage with.

At first glance this seems like a great thing. MySpace is partnering with Yahoo!, eBay, Photobucket, and Twitter to solve a pain point on the web; the inability to keep parts of your profile in sync around the web where you'd like them to be. The announcement didn't however offer any insight into how this would work beyond that, "the MySpace Data Availability initiative uses OAUTH [sic] and Restful APIs as its core technology underpinnings." After this announcement I had the pleasure of speaking with a reporter who was on the briefing call. He explained that MySpace said that due to their terms of service the participating sites (e.g. Twitter) would not be allowed to cache or store any of the profile information. In my mind this led to the Data Availability API being structured in one of two ways: 1) on each page load Twitter makes a request to MySpace fetching the protected profile information via OAuth to then display on their site or 2) Twitter includes JavaScript which the browser then uses to fill in the corresponding profile information when it renders the page. Either case is not an example of data portability no matter how you define the term!

To make this worse one of the pieces of profile information made available is a list of a MySpace user's friends. Once again there are two reasonable ways to do this: 1) MySpace provides a user's friends as a list of hashed email addresses to Twitter or 2) MySpace provides a user's friends as a list of MySpace usernames. While the hashed email route would certainly be simpler and easier for sites like Twitter to match against their own user database, I highly doubt this will be the implementation due to concerns around undesired account linking. Rather I think MySpace will choose to provide a list of other MySpace usernames. What this means is that in order for Twitter to make use of the information they must encourage all of their users to fill in their MySpace account on Twitter so that they can map a MySpace username to a Twitter username. Obviously in the best interests of MySpace to have more of their profiles linked to from around the web thus increasing page rank, visitors, and thus ad revenue.

At the end of the day it seems that MySpace is trying to become a large centralized profile repository on the internet. One where information might be available but certainly not allowed to be actually moved outside the network's walls. A good try, but just as no one would like Microsoft own identity for the entire web with Passport I fail to see how others will let MySpace own all of the profiles.

Update: Just got off a plane from London and realized that I missed a link to Chris Saad, DataPortability's co-founder, explaining yesterday that they "hope to see the MySpace “Data Availability” initiative evolve toward becoming a compliant implementation of the DataPortability Best Practices." While MySpace did not say in their release that Data Availability is a form of data portability, it certainly seemed to be interpreted that way.

Open Source "Social App Server" Might Crack Garden Walls?

From right here in Philly's backyard, Ringside Networks came out of stealth mode yesterday to launch the first open source "social application server."

And what is that exactly?

It's the software guts of a social network that you can use behind your own firewall, old school style, to build social networking "stuff" into your own site.

Companies that want to build social applications (for runners sharing times at Runlicious) or socially aware marketing programs (like Jeep owners sharing pictures and videos) will be able to use social servers to develop the whole thing on their own websites. Their brand on their site instead of their brand on Facebook next to the "get help for your gambling problem" advertisement.

Developing a social network will be harder to do this way than it would be using a white label network like Ning, but it will be completely customizable, will integrate neatly into the rest of the site, and all the data will be right there for the application owner to mine.

That's the simple version anyway; use social servers to roll your own social apps and sites. But I also wonder how it might upset the balance of power inside the behemoth walled gardens of Facebook and Myspace.

OpenSocial took the first shot at the garden walls with a goal of empowering users to keep their social data portable (well, portable inside Google anyway). However, while OpenSocial promises developers social apps without servers, Ringside is saying that at least some developers are going to want their own stuff under their control. I think social app servers are going to take shots at the wall too, but with the social networking advertisers and application ecosystem as the core constituency.

By supporting Facebook's API (with other API's to follow), Ringside makes it a lot simpler to take a social application written for Facebook and move it to its own site, or visa versa as shown in this picture. This kind of write once deliver anywhere approach to social applications raises all kinds of interesting possibilities.

Like,... Don't want to have to enter your favorite beers into Beer! in both Facebook and Myspace? If Beer! builds their application on a social server that can tie your Facebook user name to your Myspace user name, you won't have to. Facebook and Myspace just become two points of presence for the application, and they'll be on equal terms with Beer!'s own web site. Wherever you log in, you see your beers and (most of) your beer friends.

Facebook opened up this possibility when they designed their platform to have the developer's servers do the heavy lifting. Doing it this way meant they didn't have to provide all of the servers and gear to run the applications, but it also means that it's easier to stick a social server outside the wall and treat it and other branded networks like distribution shelf space. Once an application can seamlessly span the networks, it can do more than map a user's identity across sites, it may also piece together a social graph that is bigger than any one site's. Sort of an application-specific super graph.

In one possible end state, users own all of "their" social graph and data in OpenSocial, and application providers own all of "their" social graph and data in their own social application servers. Meanwhile, the big branded social networks are still in the game with very large "lily pad graphs," but they no longer see the whole picture for any one user or any single application.

As this evolves we may see developers building first for Facebook and Myspace to get quick viral adoption in a huge audience. However, as soon as they can they may start to drive traffic over to their own sites where they can provide a better or different interface with a more carefully managed brand experience. Imagine if NBC let you show your first YouTube video from a planned series at 7pm on Thursday, for free.

Or, developers may use the write once deliver everywhere strategy to deliver their app as widely as possible. Where Facebook and Myspace were once king, in this scenario they may end up as two of many application points of presence with awareness of only a piece of the associated social graph. The successful application developer with a network-spanning super graph might then be free to monetize it however and wherever they can.

Well, at least until the API wars start in earnest. There is a good reason for the server to be open source, it will spread the load of keeping up with all those inevitable API changes.

Sneaking Around With Other People's Platforms ... and a Countdown to Graphing Social Patterns West

Last summer, I fell in love. Please don't tell my wife.

This spring, i'm taking another lover. Please don't tell Facebook.

I'm not alone. Ask any alpha geek in Silicon Valley. They're all double-timing on Other People's Platforms every chance they get. I've spoken to dozens of pasty-faced coders, and every last one is pinching themselves to make sure it ain't a dream, they never had it so good. I'm telling you, folks: there hasn't been a market for eggheads this strong since Italy in the 14th century.

Developer Renaissance: Sistine Apps

If you're a web developer or recent computer science graduate, these are most certainly the best of times. With the groundbreaking launch of Facebook Platform last year, and the subsequent emergence of multiple new [open] social platforms this year -- MySpace, Bebo, hi5, Friendster, Ning, Meebo, LinkedIn, etc -- we are experiencing a Geek Renaissance the likes of which the software community has never before seen.

While there have been notable spikes of technology innovation on new software platforms in the past -- DOS in the 80's, Windows in the early 90's, the browser & the Internet itself in the mid-to-late 90's -- the recent explosion of both users and developers active on multiple social networks and platforms is unparalleled. These multiple platforms make this Brave New World such a competitive and fast-changing landscape.

Consider this: In just a few short years, MySpace and Facebook have come out of nowhere to become Top 10 Internet properties, with hundreds of millions of users and billions of monthly page views. And in addition to those two juggernauts, there are seven or eight other social networks among the top 25 sites worldwide. Several of them have also launched their own social platforms. Even Google entered the fray last fall by announcing Open Social, not a platform per se but rather a common API framework for building other social platforms (aka "containers") and applications.

In short: it's ON. That is, a massive global competition for the bits and minds of nerd-dom and every socially-enabled application on the planet has begun.

One Man's Viral Loop is Another Man's Spam Soup

So why all this attention to social platforms? Because social apps appear to be the most amazing viral and infectious method for acquiring new users quickly. The breakout growth of a number of Facebook apps in the past year -- several of which topped a million installs in just a few weeks, sometimes days -- demonstrated that integrating social network connection data into traditional software applications enables astonishing levels and rates of customer acquisition.

On the other hand, such a high level of viral customer acquisition appears to (currently, at least) be driven by a rather "spammy" invitation process, which can also have negative effects on user experience and cause "app fatigue". (Note to Facebook and others: why not dial up virality and discovery via the News Feed? What are you waiting for?) Viral distribution and user engagement aren't mutually exclusive, but it does seem that most apps tend towards one or the other -- with the notable exception of "social games" (ex: Scrabulous, Warbook, Oregon Trail).

Social Graph Clone Wars

Just as apps compete for user attention, social platforms are now also competing for developer attention using a variety of features and levels of enabled distribution (virality), engagement, and monetization. Platforms will now compete for developers by offering alternate strategies for differentiated reward -- and at the same time, those same platforms will have to make decisions about how committed they are to preserving a "happy" user experience that limits spammy app invitations and notifications.

On this particular point, Max Levchin, Founder/CEO of Slide.com, has written a tour-de-force essay on game theory for social platforms, and how platforms should structure developer incentives to drive growth. It's one of the best thought pieces i've read all year. I encourage you to check it out.

See the Apps @ Graphing Social Patterns West (March 3-4, San Diego)

I also encourage you to check out Graphing Social Patterns West, O'Reilly's newest conference on the business & technology of social platforms, coming up March 3-4 in San Diego (co-located with ETech). If you are looking for one conference that covers social networks from top to bottom, this is it. We will have keynote presentations from Google, MySpace, Facebook, Yahoo, and Forrester Research, and a ton of innovative startups and developers discussing marketing strategy and technical architecture for people building on social platforms. I hope you'll join us for an amazing journey and conversation.

(note: App developers who enter the GSP West AppNite Live Demo Contest can register for 50% off the normal conference fee)