The Open Auction for Facebook Apps

How Does Zuckerbid Work?

5 Days 12 Hours 35 Minutes

Zuckerbid is an open auction where developers can list their Facebook apps for sale.

Developer App Buyer

What’s Considered a “Facebook App”

A Definition

What’s Considered a Facebook App?

If Facebook died tomorrow, would your app still work?

Our Test:

If your app would also die, or at least be mortally wounded, it’s probably a Facebook app.

Facebook’s Definition

Facebook lists 3 types of apps that are eligible to be listed in the app center:

1) It works on Facebook.com in a canvas page

2) It’s a native mobile app built for iOS or Android but uses Single Sign On (SSO)

3) It’s a mobile web app or website that uses Facebook Login and has an immediately personalized logged-in experience

Canvas Apps1) Works on Facebook.com in a canvas page

• Never have to leave Facebook.com to use the app.

• App loads on a “canvas” area designated within Facebook through an iframe.

• A Popular choice for games

iOS/Android Platforms2) A native mobile app built for iOS or Android but uses Single Sign On (SSO)

• The app is built native to iOS or Android platforms

• New users sign up/login using their Facebook identity

• Single Sign On (SSO) gives the app access to the user’s Facebook profile information and the social graph

iOS/Android Platforms3) A mobile web app or website that uses Facebook Login and has an immediately personalized logged-in experience

• Mobile web apps that are built with responsive design and mobile-friendly markup like HTML5

• Websites that use FB login and have an experience built around the Facebook integration

What’s The Big Deal With Facebook Apps?

An Explosive Market

• As of April 2012, there are over 9 million Facebook apps

• Collectively, they generate $BILLIONS for developers each year

• There is no way for these developers to sell their app like a business

• Zuckerbid gives developers an exit strategy for their Facebook apps

Y U THINK FACEBOOK APPS SUCH A BIG DEAL?!?

Signs of a Market That’s Heating Up

There is a growing number of startups that have used the Facebook platform to achieve

astonishing results for their app in record time.

They are like tremors before the earthquake…

• Social gaming company built on Facebook’s open graph

• Grew to over 2,000 employees within 4 years of its inception

• $1.16B of revenue in 2011 • Acquired 14 other companies to date and has

expanded operations internationally• Has given over $6mm to charitable causes

Tremor: Zynga

Within 4 years, Zynga started booking revenue in the billions. They account for over 15% of Facebook’s total revenue.

Tremor: BranchOut• Attracted 30 million users in less than

two years• Raised $50mm in venture capital• Full-time staff of 45 and growing• Multiple non-advertising dependent

revenue streams, including a unique tool for recruiters

With astronomical growth, three rounds of funding, and alliances with players like CareerBuilder, BranchOut shows promise for entrepreneurs seeking to build a legitimate business on the Facebook platform.

Tremor: SocialCam

• Sought to become the “Instagram for video”

• 20 million monthly active users within the first year

• Acquired by Autodesk for $60mm within 18 months of its launch

Socialcam demonstrates the potential for accelerated growth by leveraging the power of viral user acquisition on the Facebook platform.

What is the lesson here?

Facebook apps are not just annoying games that waste time; they are growing into legitimate, value-producing businesses.

Recent Events That Have Raised The Stakes

Increasing App Value

Recent Events That Raised The Stakes

• May 2012: Facebook App Center was released

• June 2012: Facebook Announces they’ll phase out their credit system and replace it with credit card billing for in-app purchases

• July 2012: Facebook introduces new monetization opportunities for developers, including subscription payments.

The Facebook App Center

In May 2012, Facebook started the App Center.

Developers rejoiced. It was like the Zuckerclaus dumped out pirate chests full of new app users.

The Facebook App Center

• Users browse by category, making apps easier to find.• Users get customized recommendations for apps

based on their friends’ activity.• Rapidly growing apps are listed in the “trending”

category—AKA free exposure to millions of eyeballs.• In the first month, has generated 240% more app

installs for developers.

Q: Why is the App Center such a big deal?

A: It’s a massive free distribution channel that can catapult apps to success overnight.

The Facebook App Center

One more little nugget about the App Center:

The App Center will likely attract talented developers who need a distribution channel for their HTML5 mobile apps, since they are not eligible for the Apple or Android stores.

New Monetization Options

In the summer of 2012, Facebook announced 3 new payment features:

1) Developers will be able to sell premium apps, like in the Apple app store

2) No more in-app purchases using Facebook credits. Users will make payments using a credit card in their own currency

3) Developers will be able to sell subscriptions to their apps. This is perfect for premium content publishers

Let’s Review

• The Facebook app is a proven business model, which has gained interest from top venture capital firms.

• It’s easier than ever to accelerate user growth through free distribution channels like the app center.

• Developers can get paid for virtual goods or charge subscriptions in every major world currency.

The Open Auction for Facebook Apps

Beta Release in Fall 2012