Life as a barnacle on Facebook's hull 11 Oct 2007

From The New York Times:

"Last month, there were reports that Microsoft was considering a $500 million investment that would value the three-year-old company at up to $15 billion. Now it appears that such exuberance has infused the expanding Facebook universe, even though no one has yet proved it is possible to build a profitable business with sustainable revenues on the site. Some developers report earning tens of thousands of dollars in advertising with the applications they have created. Yet their applications are mostly running ads promoting other Facebook applications -- a situation that recalls the earliest Gold Rush miners, who earned a living selling shovels to other miners."

We really doubt that it's possible to generate a sustainable business on the back of a Facebook app. After all, if you create something that's super successful, what's to stop Facebook from producing their own version? The NYT's analysis of the SuperWall widget sums this up perfectly:

"Super Wall, which lets Facebook members leave messages, photos or videos on one another's profile pages, is an expanded version of a Facebook function built in on profile pages, called the Wall. Though 10 million Facebook users have added Super Wall to their pages, it could be quickly eclipsed if Facebook decided to improve its own Wall feature."

Reminds us of Firefox vs. Flock and Amazon vs. Alexaholic.

[via 37signals]