MELBOURNE, AUSTRALIA: Facebook has been one of the darlings of the social networking community since its inception in February 2004. In October 2007 Microsoft acquired a 1.6 percent stake in Facebook for $240 million, valuing it at a staggering $15 billion.

At the time most commentators took this as a sign that Facebook was heading for the same never-ending equity growth that Google had experienced. However, a small piece of research created a doubt if this will be the case. David Mitchell, SVP IT Research, Ovum comments on what Facebook should do to the situation.

The research points to a decline in the Facebook developer community (see table for a simple illustration of the point).

If this data is at all indicative of the broader health of the Facebook economy, then there are two things that the Facebook team must do to turn the situation, and these are far more important than the user-interface facelift that they are currently engaged in.

* Dramatically improve the quality and usefulness of the applications being built on the platform, through incentivising quality applications that have measurable personal or business value while removing or blocking the trash applications.

* Improve the privacy model. Access to the social graph by Facebook applications is a major issue, and those applications should also be subject to a “prove you can be trusted with my social graph” test before they are allowed out. “This may sound draconian but I have had too many poorly behaved applications run amuck and send invites across my whole social network, despite me clicking the “Don’t Invite” buttons, for me to be comfortable otherwise” said David Mitchell

Without improvements along these lines, I (for one) am close to the point of seeing insufficient continued utility in Facebook to persevere in using it.

Developer communities are crucial to any platform
The experience of the early days of Microsoft Windows tells us clearly that developers are fundamentally important to the growth and sustainability of any platform. Microsoft Windows succeeded because developers created applications that users wanted to run, and these were only available on that platform. Sun Microsystems in more recent years has placed a huge importance on attracting the developer to its platform, as a fundamental plank in its whole corporate recovery strategy.

Although developers rarely have any direct influence on purchasing decisions, and ever more rarely have any direct purchasing authority of any significance, they do govern many of the technical choices that an organisation makes. They also, in the independent software vendor community, decide what applications get built, on what platforms. Developers and their sustained interest in a platform are its lifeblood.

Facebook applications – viruses?
The applications that are being built on the Facebook platform are, for me, one of the reasons why the platform may be experiencing decline. The proportion of totally banal applications seems to be on the increase and there are fewer and fewer applications that my network, as an example, is finding to be sticky.

Other than Super Wall, Photos, Notes and Posted Items, most applications are installed for a day or so but are quickly removed as it becomes evident that they are only concerned with selfpropagation and the collection of data on your social graph. In a more traditional application world an application that tries to selfpropagate and that takes personal data is usually classified as a virus and is removed as soon as it is detected, before it can cause harm. The same is beginning to happen with Facebook applications.

Analysis by Andrew Chen shows the majority of Facebook applications to be in the Just for Fun and Gaming categories. The issue follows on from this. Many users are happy to allow the implicit contract of access to personal data that drives advertising, in return for access to a useful platform with useful applications. Where the contract is falling down is that the contract is now tilting towards the platform owner, with improvements in utility not being incrementally created for the user community.