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A Comparison of the iPhone App Platform Vs. Facebook App Platform

What are the business prospects for iPhone applications compared to Facebook apps? There are some interesting comparisons to be made between the two on the types of apps, the revenue models, and virality.

“Useful” vs. Fun Apps

Web services seem to be polarizing between utilities and entertainment, as Alex Iskold notes. Both Facebook and iPhone are popular for games, but the iPhone has many more business/productivity apps. While Facebook has a few “useful” apps, comparing it to the iPhone platform clarifies for me why it will be hard to make it a place for useful apps. Unlike the iPhone platform, it was never designed for serious activity, it was built for communication, flirting and staying in touch. (Here are 10 useful Facebook apps.) The iPhone, like any smart phone or computer, is designed for productivity, in addition to entertainment. This is no judgement on fun vs. useful apps. But because of this, the iPhone will have more options for a range of applications than Facebook.

Who’s Willing to Pay?

While the prices of iPhone apps are still in flux and the prices did seem high early on, it appears that free apps are decreasing in proportion and paid apps are increasing, according to Pinch Media. The common price point may end up forming around the 99 cent and $9.99.

People are clearly more willing to pay for apps on the iPhone than they are on Facebook. If you pay $200 to $600 for a phone, whats $5 or $10 more? The willingness to pay is a function of the platform. It’s a higher end, higher price point market, which means in theory it will attract more developers. Social games for Facebook generate say $0.50 or $1 CPM compared to an app for the iPhone that could cost $10 to purchase, though granted the $10 game would require much more work to build. If Facebook’s payment system or some undetermined new ad system proves a success, that could change things.

Advertising: Social-ness vs. Location-ness

Right now, advertising on social networks like Facebook is still a crapshoot for the most part. The best prospects are for social-related ads, which take advantage of the social graph on the site. Mobile ads are also still in the early stages of development. But they do offer one thing that ads on Facebook do not: location. Serving specific contextual or behavioral ads based on where someone is located would provide interesting options that PC-based social networks do not.

Virality: Friends, Friends, Friends

Facebook wins on virality, even with changes to its platform that have made gaining users not quite as easy. The downside for iPhone apps at least right now is there is not the kind of viral growth magic that you get on Facebook. This could change if and when developers come up with social networking apps that take advantage of the iPhone’s specific benefits, such as location and touch screen.

Fred Wilson (who inspired this post) raises a related question: does being first on the iPhone matter as much as it did on Facebook? In other words will there be so much virality that those that get in first like Loopt, Yelp and Twitterific take leading positions that others will have a hard time challenging? I think because iPhone’s virality is not as powerful as Facebook’s later apps will still have a good opportunity on the iPhone.

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A Serious Facebook? Is It Possible to Create a “Facebook Adult”?

Can Facebook be turned into a “serious” social network? This is not an idle question. Facebook has up until now depended on ad revenue, which has not been as outstanding as the company could have hoped. More serious, practical applications and associated users could mean more opportunities for revenue from a range of products and services. In a recent post, Stanislov argues that yes, Facebook can be made more serious and practical if those serious people could be organized together, separate from the giggly teenagers, and given the right features and serious applications organized for them.

Wondering whether Facebook is the best place for serious, practical apps as opposed to, say, throwing sheep, I asked Stansislov to point out some serious Facebook applications. He quickly came up with a good list (I could quibble and say serious people would rather read RSS feeds in their feed reader, but I agree with most of them). He argues that developers would build more of them if the environment was well-suited for them. Maybe. If the site could be reorganized in a way that made it welcoming for these practical apps, then that’s possible.

But another issue this raises is that doing that could pull apart the whole reason much of the giggly crowd comes to the site. Sixteen-year-olds don’t go to Facebook to do serious things like check stock quotes or read the NYT. They come to communicate, view photos and “buy” their friends. If Facebook becomes known as a serious site, they could move on to Twitter or Flickr or MySpace or the next start-up. Is it possible to split off and create a “Facebook Adult”?

LinkedIn has a leg up on Facebook in this department. LinkedIn has opened up its platform for third party developers, though granted it’s way behind Facebook. But if developers start to build banking, shopping, insurance, payroll, and investing apps on LinkedIn and Facebook (or even Facebook Adult), where would users rather use them?

Amazon’s Page Recommender Widget Moves Into Content, Challenges Start-ups

Amazon has launched a new Page Recommender widget that affiliate bloggers (and presumably other publishers) can put on their sites.

The widget makes personalized recommendations of other pages within a Web site to users, apparently based on their individual preferences. Whether the recommendations are based on 1) just their browsing history within that particular site, 2) also their browsing on other affiliate sites, 3) their product preferences within Amazon.com proper or 4) all of the above, is unclear.

In addition to the new content recommendation, the widget also recommends products. The product recommendations are also personalized based on individual preferences. From Amazon, via O’Reilly Radar:

The products that are recommended are based on the interests of each individual visitor as well as items that convert well for your website. The products that you see may be different from the ones that are displayed to others based on their individual behavior.

This move into content recommendations is not too suprising, since Amazon’s product recommendation engine on its site has been one of the best examples of recommendation engines. That is, those parts of the site that say “readers who were interested in this book were also interested in this.” In theory, using that recommendation engine for Web pages instead should not be too big of a change.

Because this is a new form of affiliate revenue, to some extent this competes with Google (Google and Amazon increasingly compete in other areas such as cloud computing), but more directly it takes on a number of start-ups that are providing similar or related services. These companies, such as Aggregate Knowledge, Inform and Loomia, and Proximic, and to a lesser extent Sphere, provide recommendations for related content and/or products based on the history of traffic and click-throughs in their networks. Some of them can do nifty things like recommend a product in a completely different area from an article that someone has viewed. For example, on a page about gardening, the service could recommend a specific type of bicycle.

However, as far as I know most of these start-ups are not basing their recommendations on personalization as Amazon seems to be, but rather the aggregated knowledge of their networks. There is an interesting strategy difference in presenting the most popular versus the most individually customized recommendations (see my previous post).

The Amazon widget also falls into the larger trend of ads and content merging together (Google’s AdSense is the most obvious example of this. When you search for shoes, the distinction between the unsponsored search results and the sponsored links has become less important for users.)

This could the beginning of a broader push into content recommendations for Amazon. However, I’m not sure this is a big challenge to Google, I think it’s a much bigger concern for start-ups.

Social News: Popularity Vs. Personalization

ReadWriteWeb has an interesting post on “collaborative filtering” on social news sites. The writer makes the point that there are two types of social news recommendation models: one that provides you with the most popular stories from all members of the site, and another that provides you with stories that are personalized to you based on your past reading habits and those with similar interests as you.

There are different camps here: Digg based on the former model of popularity and others such as Reddit, Stumbleupon and Searchles that recommend stories based on various forms of personalization. (There are also services such as Aggregate Knowledge and Loomia, which use some aspects of social recommendations to recommend related articles or products.) However, the two methods, popularity and personlization, are not mutually exclusive. Digg is about to implement a recommendation feature. And many sites, from big media sites to social media sites, could provide both a most popular section as well as personalized recommendations.

Fresh Ways To Visualize News

Online news has gone through many changes since its early days as a mostly text-based enterprise. Video and multimedia presentations are now standard fare on many top sites. But there is still room to innovate in the presentation of stories, audience debates and other information. For large news companies and individual bloggers alike, coming up with new methods of presentation to keep people coming back and stay longer is an ongoing goal.

The Color Of Debate

White Spectrum is an interesting interface to view debate about “White Season,” a BBC’s television series that examines the white working class Britain. The Flash-based White Spectrum arranges the comments as dots in a outer space-like design. Comments are sorted and float towards certain emotions such as anger, fear, hurt, happiness or caring. For example, a comment with the word “abuse” in it floats towards the emotional dot for “hurt.” One can quickly recognize where the intense or angry debate is happening on this potentially explosive subject. (via Information Aesthetics)

Fun With Headlines

Our Signal

An intensely graphical display of news headlines comes from OurSignal, a mashup of social news sites Digg, Reddit, Delicious and Hacker News. The headlines are arranged in boxes, which are categorized by color and presented at different sizes based on popularity. The site’s form follows its functional design , allowing you to quickly zero in on news breaking across this part of the Web.

News As Games

News as Game

But who wants to read news, when you can play games? NewsBreaker is a RSS news reader disguised as a game of Pong. The site was designed by Fuel Industries, for MSNBC’s A Fuller Spectrum of News Campaign. It’s like a souped up game of Pong, except when you break blocks, headlines float down and are saved at the side of the game and can be read later. It’s an example of gaming (“funware“) spreading across the Web. Reading news can be fun. Who knew?

And Much More

This is just the beginning of innovation around news presentation and storytelling. For more interesting ways of visualizing the news, check out multimedia guru Mark Luckie’s take. He has examples of photo streams, live news cameras, map extravaganzas and other interesting designs and presentations.

NowPublic: Don’t Call It Citizen Journalism

NowPublic is one of a group of crowd-sourcing media sites thave have cropped up in recent years. Newsvine, Current, CNN’s iReport and and South Korea-based OhMyNews are others that crowd-source links to news, or let authors write or shoot video of actual original articles. News giant Gannett also jumped in the fray in late 2006. Early on, NowPublic was noted for being one of the few sites to publish AP articles and allow people to discuss them. NowPublic however, doesn’t consider itself a “citizen journalism” service, its founder tells CNet. Instead it’s a brigade of “eyes and ears.”

Some of the others in this area are not shy about calling their services news. CNN’s iReport is taglined “Unfiltered. Unedited. News” and Current says, “You Make The News… We Put It On Television.”

Recently NowPublic released a number of new features, including a points-based ranking system to increase credibility for trusted users of the site; a FriendFeed-like news stream of people’s YouTube, Flickr and Twitter activity that can act as a kind of person’s personal news service; and a personal dashboard of news, photos and videos from whereever people want to receive news.

Coming at the same problem from the local-based approach are a number of local news and information aggregators.

Outside.In’s Maps Local News, Tweets

Start-up Outside.in recently launched Radar, a service that tells you what is being written online–from news sites, blogs etc.–about a particular geographic location. For example, it tells you what’s happening within 1000 feet of your location. It also collects “conversations” about a location, such as Twitters. The service also remembers what businesses or even neighborhoods in another city that you like, and updates you when things happen at those places. All this information is organized into a map-based interface.

Aggregating neighborhood data is an increasing area of interest. In January another site, Everyblock, launched a similar service that aggregates news, photos and government information, such as crime reports and restaurant health inspections. Everyblock, which has received a grant from the Knight Foundation, graphs all the data onto maps. Yourstreet, which maps news on down to the block level, is another similar service.

In addition to start-ups, giants such as Google and Yahoo are active in the local information space. Google recently release Map Maker, that allow people to create their own maps, and Yahoo has a service in India called Ourcity, and it has also licensed neighborhood information from Urban Mapping. How this will all translate into local advertising is key.