USV hosted another Facebook Hackathon tonight. The first hackathon USV hosted was really productive; we learned a lot and met a bunch of talented entrepreneurs. This time around was just as good.
This iteration of the Facebook Hackathon was much more focused on the monetization side of the Facebook App economy. Some monetization-related comments (all paraphrased):
“How many people have a Facebook app? <30 people raise hands> How many people make money on their app? <3 people raise hands> How many people make enough money to cover their New York rent off their Facebook app? <1 person raises his hand>”
“No one is trying something very obvious: applying remnant ad networks to Facebook Aps” [note: this anecdotal comment is contrary to this recent meme about Google’s backdoor into Facebook monetization.
“The going CPA on app installs is $0.50 per install. However, the going rate in the Facebook App M&A market is ~$1.00 per user. So, if you can make an app with almost no churn (which isn’t too hard) then there’s an arbitrage opportunity.”
A big thanks to Michael Galpert for taking the initiative and continuing this group in Amit’s absence. Looking forward to the next one.
Update: While on the subject of monetizing social network inventory, Andrew Chen’s latest post on the subject is mandatory reading. Particularly the section on interest vs intent.
In reality the AdSense is a very bad ad network. More than 25% of the ads are spam link sites (no content - just links to other sites - using cj and other ad agency and google ad sense). You can easily be in a loop of only link spam sites. The truth is that no matter how good is your service - you are selling spam to your users. Google tries to conceal it but the more you try the google AdSense the more you see that it is truely bullshit. The real question is why people are clicking at this sites. (I for once will be glad to know the motive of those people - the sites usually are so off from the content and unless you are really bored or stupid there is no reason to click on the ads). It is time to burst the bubble of Google AdSense (and other ads agencies who are making the web a crappy place.