Home Facebook Acquisitions: Fad or Proof of Platform Success?

Facebook Acquisitions: Fad or Proof of Platform Success?

On Monday the blog Inside Facebook broke the story that the Facebook-only application Favorite Peeps had been acquired by slideshow creator Slide (and Slide confirmed to me yesterday that they had reached an agreement with the creator of Favorite Peeps). The rumored acquisition price was $60,000. This is the second Facebook app buy-out reported by Inside Facebook in the past week. Last Friday, they reported that the Extended Info application had been acquired by travel startup SideStep, who make a top 50 Facebook app called “Trips.”

These acquisitions are fairly significant because they affirm how seriously companies are taking the fledging Facebook platform. Just about a month old, the Platform is already attracting about 1,000 new developers per day who have created hundreds of applications that reach millions of people. The top 25 applications alone collectively reach over 55 million users (though, obviously with a good deal of overlap). Because these apps have yet to make any money, and whether that will be possible remains an unanswered question, these acquisitions are about the users or the developers.

Two of the most aggressive companies in the Facebook application space are rival online slideshow apps Slide and Rock You. Slide owns the most popular application, Top Friends, which reaches 7 million users, and the third most popular, Fortune Cookie. RockYou’s Horoscopes and X Me apps, meanwhile, are the fifth and sixth most popular. Together, the companies’ Facebook forays reach at least 21 million users. It’s easy to see why investing in the Facebook platform is an attractive gamble for these companies, even if many of these apps never turn a profit. It’s all about eyeballs.

In the case of SideStep’s purchase of Extended Info, which on the surface seems odd — it is a popular app at 130,000 users, but it is not among the elite Facebook applications, and it has nothing to do with SideStep’s core business of travel — it appears the acquisition was more about buying a talented Facebook developer, than about acquiring users. Extended Info’s creator, Trey Philips, will reportedly beleaving school to joining the SideStep team in Santa Clara, CA.


So will Facebook acquisitions continue? I think that’s probably highly likely. With more than 38,000 developers already using the Facebook Developer app (which helps you create applications for the platform), buying popular apps is a good way for companies looking to get into the Facebook ecosystem to screen developers. And with the Facebook platform continuing to grow in popularity among its rapidly expanding user base, it seems inevitable that companies will try to buy their way to the top, especially given the relatively cheap price of purchasing Facebook apps (Favorite Peeps, for example, was had for only just over US 4 cents per user).

Who’s next? My bet would be Graffiti, which is a slick app that lets people draw directly onto users’ profiles and commands 3.7 million users. Or the 1.7 million user strong Honesty Box, which allows users to send anonymous messages to each other, and is the app that I have been asked by friends to install the most. What do you think? Will Facebook acquisitions continue or is this a passing fad? If you think more apps will be bought, which one is next?

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