Z-Commerce, a new service launching today at DEMO 09, aims to address this problem. But the big question is this: are there any Facebook applications worth paying for?Are any application developers making money on Facebook? Not really, but they could be. According to Bruce Richardson of AMR Research, less than 2% of Facebook developers make any "real" money. Part of the problem is that Facebook has not had any decent e-commerce engine for monetizing applications - until now, that is. Instead, developers have had to rely on the advertising model, which isn't always a good fit for their type of application, nor is it all that effective.
Zuora, the company behind Z-Commerce, is a startup already familiar with subscription billing and payments services - it's their main business. And now with Z-Commerce, they've integrated their SaaS solution with the Facebook API to provide their services to Facebook developers. This opens the door for Facebook apps to "go Pro." In other words, application developers are provided with the infrastructure and tools to make their applications subscription-based services. With a Z-Commerce-enabled application, developers can implement a business model on Facebook similar to what we have on the iPhone today: free apps that prompt you to upgrade to the full, paid version.
But there's still a small problem here. Most Facebook applications aren't worth paying for. "It's sort of the chicken and the egg scenario," says Zuora chief executive Tien Tzuo, "we're providing the chicken, but are hoping it will hatch an egg."
It's not as if there isn't potential for a paid application marketplace. Facebook hosts some 50,000 apps and there are more than 600,000 developers on the Facebook platform. The problem is that a good bit of these apps are time-wasters, games, trivia, quizzes, and other somewhat non-essential applications - hardly anything worth your hard-earned money.
Z-Commerce, though, can imagine all sorts of applications that could take advantage of this new e-commerce platform. We would love to see professional, useful applications such as they ones they've envisioned - things like LinkedIn Recruiting, Relationship Managers, and other imaginary - but exciting - application ideas.
To get the ball rolling, Zuora is launching a contest for which they're seeking five Facebook developers to be the very first to build a subscription-based application with Z-Commerce for Facebook. Selected developers will receive free access to Z-Commerce for Facebook for one year. For more details, visit http://developer.zuora.com/facebook.