Mark Zuckerberg’s (Harvard) Facebook is creating opportunities along the way for other entrepreneurs. The Wall Street Journal (sub required) is calling it a gold rush in an article today as programmers begin to build widgets etc for the site and its users. We have seen this concept before — where a hugely successful firm (Fedex) or product (ipod) creates opportunities for other firms. This piece, in a virtual sense, confirms the size of the campus market (both physical, virtual, and otherwise) Here are some snippets from the article.
Another online gold rush is on. Entrepreneurs are scrambling to create small software programs for Facebook Inc.’s social-networking site and grab footholds in its emerging economy.
Three months ago, the Palo Alto, Calif., company invited software developers to create applications for its site. The response was immediate: Facebook says more than 70,000 developers, from college kids to big-corporation engineers, have signed up for the tools needed to build the free applications.
Many of the developers of these applications are entrepreneurs looking to start new businesses while others are expanding existing ones. And the applications, which are inexpensive to create, have the potential to become a large source of revenue and customers for those companies that can successfully mine Facebook’s 30-million-strong community. To that end, companies are using a host of business models. Some, for instance, are selling advertising around the applications, while others promote their own products and services on Web pages shown to users of their applications.
“This is a watershed event that is going to affect business and technology for many years,” much the way Microsoft Corp.’s Windows operating system did, says Rodney Rumford, editor and publisher of FaceReviews.com, a Solana Beach, Calif., company that reviews Facebook applications online and provides consulting and application-development services. “It’s a tool for people to discover [businesses] in a way they couldn’t be discovered before.”
The applications are garnering a big buzz among Web companies and venture capitalists alike. Menlo Park, Calif.-based venture firm Bay Partners has raised $300 million specifically for companies developing Facebook applications and is making $25,000 to $250,000 investments per application. “All Internet companies need a Facebook strategy or a presence on Facebook,” says Partner Salil Deshpande, because Facebook usership is growing so quickly.
Indeed, Facebook’s monthly visitor numbers doubled to 30.6 million in July from six months earlier, according to measurement firm comScore Networks Inc. That growth has been propelled by a mass movement onto the site since Facebook opened itself to nonuniversity email-address holders.
The Facebook platform is so promising in part because its members use it to connect with people they know — or want to know — in the nonvirtual world. Unlike News Corp.’s MySpace and most other social-networking sites, Facebook members aren’t anonymous. They use their real names and connect with each other to the degree they choose. Facebook also allows businesses to interact with Facebook users fairly freely, while restricting access to any personal data.
“They make it a safe place for communication and for doing business,” says Lee Lorenzen, chief executive of Altura Ventures LLC, a Monterey, Calif., firm that also is funding application creators and has purchased several applications.
“We’re certainly pleased with how much it’s taken off,” say Brandee Barker, a spokeswoman for Facebook. “We already have a thriving ecosystem of businesses built on the Facebook platform.”