26.5.09

Developers creating apps for social media sites are emerging as a profitable force

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"This has interesting ramifications for social media sites going forwards. It is foreseen that the current status quo of having few big networks is unsustainable, and that social networks will start to splinter into communities of interest (travel, music, food, etc.). As this happens, there's a matured opportunity for advertisers to partner developers on specific apps targeting niche audiences. Companies which have already proved their credentials will become big players. Advertisers, start taking note of up-and-coming developers - these guys could be your business partners sooner than you think!"
Developers move beyond second fiddle status and begin to rival social media sites themselves in revenue terms

Developers creating apps for social media sites are emerging as a profitable force in their own right, collecting revenues that look set to eclipse Facebook’s income from advertising.

Happily, a fascinating article from AdAge.com - link to the full text below - finds that the world’s biggest social network is benefiting from their success: the site is expected to earn $500m in 2009 revenue from such apps.
Social gaming company Zynga, for instance, is the top developer on Facebook. The lion’s share of its revenue comes from the sale of chips for its Texas HoldEm Poker (pictured, right, along with other titles published by the company). Weapons in Mafia Wars (pictured, above) are also a money-spinner for the company. Zynga is expected to take over $100 million in 2009.

According to AdAge, there are at least a half dozen other companies in the $10 million to $50 million range, as well as a clutch of smaller players.

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