Wednesday, March 19, 2008

Payments: Critical for Social Network App Platforms?

I recently had the pleasure of connecting with TS Ramakrishnan.  Super smart guy and clearly one who know a thing or two about how to launch app platforms/APIs for social networks.

TS has an interesting short-list of four requirements for a successful social network app platform:

  1. Users -- the social network must be large enough to bring lots of distribution to app publishers

  2. Language -- platform must be backwards compatible with existing web development languages/frameworks

  3. Marketing -- the social network must expend significant effort to recruit, retain, and support app developers

  4. Transactions --  the social network must facilitate secure transactions (i.e., payments)


I found his last requirement to be really thought-provoking...  It sounds like a pre-requisite for ecommerce transactions, but we haven't seen a whole lot of apps pursue ecommerce models yet on social networks.  The vast majority of social apps are 100% ad-supported, but we're starting to see some "freemium" models develop.  For instance, Slide's SuperPoke app has Premium poke actions that users can get access to via a monthly subscription.

Even in an advertising-dominated economy, I wonder if the social apps on Facebook might monetize more efficiently if Facebook were to facilitate the payments/collections process between ad networks and app publishers?  E.g., would social ad networks operate more efficiently if ad units were rendered in FBML and Facebook provided standardized tools for measuring impressions, clicks, follow-on actions, pathing; and financial transaction support for buying/selling social ads...

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