From The New York Times:
"Facebook, based in Palo Alto, Calif., opened its service to outside developers this spring, inviting them to create tools for the site and to try to profit from them. Since then, more than 4,000 “applications” have flooded onto the site, spicing it up with games or whimsical programs called widgets that let you turn your friends into virtual zombies and more practical tools that let users display images of their favorite books, music, movies and wine on their profile pages.
The wave of attention from users and developers has sent estimates of Facebook’s value soaring into the dot-com stratosphere. 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. And developers must cover the cost of hosting the applications on their own Web servers."
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