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Facebook’s Apps Platform: a $15 billion Dance Club for Users and Developers

Dance clubs provide a fantastic venue for both musicians and club-goers.  Musicians can show off new works and find new fans, while dancers groove to the music and make new friends.


It’s more than just fun.   A new study from the University of Maryland’s Center for Digital Innovation, Technology & Strategy (DIGITS) shows that today’s digital “dance clubs” can also generate jobs and some serious economic activity.  DIGITS analyzed Facebook’s apps platform and found that “the Facebook App Economy created 235,644 jobs, adding a value of $15.71 billion dollars to the U.S. economy.”


So how is Facebook’s apps platform like a dance club?


Start by seeing that a dance club is a classic “two-sided market.”  One side is the musicians and the other side is the fans attending the club.  For Facebook’s apps platform, one side of their two-sided market is apps developers and the other side is Facebook users.  (Facebook is the dance club owner and manager.)    And as any dance club owner knows, you must cultivate both sides of the market to achieve success.  If you lose the dancers/users,  you lose the musicians/developers, and vice-versa.


“The Facebook App Economy created 235,644 jobs, adding a value of $15.71 billion dollars to the U.S. economy.” – DIGITS


Facebook seems to be managing the delicate balance of keeping both sides happy.  On one side, Facebook makes it easy for apps developers to create, publish, and serve millions of users.   (It’s way easier to commercialize a Facebook app than it was to code and distribute a Windows application a decade ago.)   On the user side, Facebook keeps us happy with frequent feature upgrades and new apps that integrate with the platform’s social network.


Sure, there are other successful apps platforms, like Apple’s App Store and Google’s Android Market.  But Apple and Android are serving all types of apps to anybody using their mobile platform – an isolated experience, while Facebook offers only apps that fit into a social network of connected users – a social experience.


That community connection has a lot to like for both apps developers and users, as shown by DIGITS’ report.  Developers like the viral marketing among Facebook friends, and the structured access to user data for personalization and interest-based advertising.  And Facebook users seem to like the granular control they have over each app’s privacy settings and over how their in-app activities are shared with others.   Facebook users are installing more than 20 million apps every day and the Facebook apps keep coming, so they’re clearly doing right by both sides of the market.


At Facebook’s “club,” fans and musicians play, listen, and interact as a community.


It’s as if Apple and Android are big dance clubs where everyone wears headphones and listens to their own music.   At Facebook’s club, fans and musicians play, listen, and interact as a community.


I’m happy with my Apple and Android apps, but Facebook still has the hottest club on the internet, one that’s widely “liked” by users and developers.