This is part II of a series.

What kinds of apps are working on Facebook, and what can we learn from them as developers and designers? How do we even define success on Facebook applications? Installs? Active users? Canvas page views? Churn rate? Let’s see.

Let’s begin by taking a look at the Appaholic Viral Dashboard. Over the past few weeks, I’ve identified two types of applications that seem to do especially well on Facebook:

1. New Social Interactions

These include the obvious apps like SuperPoke, FreeGifts, and SuperWall, but I’d also includes apps such as Harry Potter Spells and Happy Hour here. These apps give you more ways to interact with and distribute social capital amongst your friends. As Alex Krupp put it:

• A good app lets you buy an mp3 for a dollar. A great app lets you buy your friend an mp3 for a dollar.
• A good app makes your taste in clothes look cool. A great app makes your friends’ taste in clothes look cool.
• A good app lets you poke yourself. A great app lets you… Well, you get the idea
  http://alexkrupp.typepad.com/sensemaking/2007/07/possession-of-s.html
  

2. Viral Games

These includes apps such as Zombies, Werewolves, Pimps, what have you. These are apps that ask you to bite/infect/pimpslap your social graph, which also just happens to send an invite to your friend along with a bite/beer/pimpslap. Being that the core gameplay in these apps involve viral distribution through the social graph, it’s no wonder that they are extremely popular. Based on anecdotal evidence on my Facebook news feed, the longetivity of apps such as these is extremely limited, and the churn rate is probably very high. The problem is that there’s isn’t much to do once you’ve spammed your entire friends list to add your app.

In any case, the essential trait that drove the virality of both these social interaction apps and these viral games is that their core design involves direct interaction with your friends (and therefore invitation of your friends). Your friends have to install the app to use your SuperWall, you have to PimpSlap your friends to gain ranks in Pimps, your friends get an invite when you SuperPoke, etc. These kind of interactions naturally help these apps become extremely viral.

Apps like my own that don’t directly leverage the social graph interaction at its core have a much harder time in terms of growth (but still much better than a typical web app), so naturally I’d like spin the numbers a bit and talk about why maybe installed users isn’t the best way to define success on Facebook.

Ilya wrote in a comment to Part I: “Frankly, I can’t see how a Facebook application can be monetized, ever. Can any of the standard IAB sizes even fit into that little box in the profile? And will users throw a chunk of advertising into their profile? Unlikely.”

It’s an interesting question that I think a lot of others are asking as well, and the answer is that the discussion is moot.

One of the major caveats of a Facebook app is that advertising is expressly forbidden on the profile page. Advertising is only allowed on Canvas pages devoted to the app. Most apps today tend to be profile widget type apps rather than real, full featured applications. These types of apps have to either rely on transaction revenue (which is a completely unexplored territory on Facebook except for Facebook’s own Gifts! feature), or seek to monetize the few canvas page views they get when users directly interact with their app. This is why I don’t believe that the installed user count is a very good metric to measure the value of a Facebook app. A much better metric would be something like canvas page views or visits per day - traffic that is at least monetizable though advertising.

There’s been a lot of talk recently about the churn rate of Facebook apps, and the short attention spans of most Facebook users. I’ve gathered some statistics via Google Analytics from my app over the past few weeks, and I’d like to share a few numbers here to counter some of that punditry. These numbers are from the past 7 days:

14,069 Visits
32.84 Pages/Visit
00:20:45 Avg. Time on Site

That comes out to about half a million canvas page views over the past week and growing very rapidly, for an application that is less than a month old. It’s by no means an explosive success, but 2 million page views in the first month, for an app that was developed over the course of a few evenings after work, spread solely though word of mouth - it’s not too shabby. Even at about 7000 installed users, the canvas page views count for this app is probably on par with most apps in the 100K installed users range. (Interestingly, if these numbers are to be believed, the average Mafia visitor spends more time on the application than the average Facebook user spends on Facebook itself!)

Also, since launch, my churn rate is actually less than 10% (calculated by dividing the number of users who have ever installed my app as stored in my database, by the current user count).

These concerns about monetization, churn, and attention span are here today for the same reasons that people have been screaming “hype and hyperbole” over the platform. It’s a combination of having a very young platform with not enough time for real applications to be built yet, and the fact that the small, unmonetizable, high churn rate applications are also naturally the most popular in the short term, by certain metrics, due to their core design.

So to sum up - building a new way to poke or yet another viral game will probably get your app very popular, but the caveats are that the longetivity of such a strategy is already questionable, and monetization will be difficult. The way forward for Facebook apps are concrete, fully featured apps on Canvas pages that offer real value to users. There are wide open opportunities for the next EBay, Amazon, Yelp - what have you - to be built on Facebook, and I guarantee you that there is at least one team for every successful web 2.0 idea out there today, working to port that to Facebook, right now.

So how should you build one? Stay tuned for Part III of the series.