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Allen Stern of Centernetworks has a post up about how to get rich — theoretically at least — by coming up with a popular Facebook app. The numbers he has are from Adonomics (formerly Appaholic), an advertising analytics service aimed at Facebook developers, which is owned by a venture fund called Altura (“the first only-Facebook VC”). Adonomics will also guarantee a certain number of installs of your app for a fee.

According to Adonomics, the top Facebook app is FunWall, with 22 million installs and 3.6 million active users — or 16 per cent of the total. It’s not clear how the service defines active users. This app, according to Adonomics, is worth almost $30-million. If you do the math, that works out to about $8 per active user. Where does Adonomics come up with this figure? That’s also not clear. Apponomics is more than a little coy about the methodology behind its calculations.

I’m betting the numbers come from a place in Silicon Valley known as “Thin Air.” Is a Facebook app worth something? Sure it is. But is FunWall in any real sense “worth” $30-million? Maybe in some alternate universe. As an example of how Adonomics does math, the site says that Facebook has 60 million active users and a valuation of $18 billion, which “translates to $300 per active user.” Except that valuation for Facebook is hypothetical, and as a result virtually meaningless. (The script the company uses also likely violates Facebook’s terms of use).

Jeremy Liew of Lightspeed Partners says there are a number of factors that determine what a Facebook user is worth. Greg Thomson of Toronto has developed a number of apps — including My Aquarium — and says he now has more than 8 million installs. In this video from FacebookCamp, he says an active user is worth about $3 per year. Favourite Peeps was worth 4.5 cents per user, while RockYou says it thinks the average app user could be worth between 30 cents and a dollar.

About the author

Mathew 2430 posts

I'm a Toronto-based senior writer with Fortune magazine, and my favorite things to write about are social technology, media and the evolution of online behavior

10 Responses to “What is a Facebook app worth?”
  1. […] tend to agree with Matthew on this one. I realize that these services can pull in great amounts of money through advertising, […]

  2. Matthew,

    We don't mean to be coy but straightforward. The following post outlines how we come up with the valuation:

    http://blog.adonomics.com/2007/09/24/an-adonomi

    Facebook's $15 billion valuation is not hypothetical — because Microsoft and and individual investor put money in at this price. I actually think it is worth $100 billion (see blog.adonomics.com for the details as to why).

    WRT FunWall, an app that has 1/5 to 1/4 of the entire facebook audience has a valuation premium because Google, Yahoo, IAC, AOL and others would pay a lot to have an app that would allow them to harvest out a big chunk of facebook users over time to a competitive social network.

    Thanks,
    Lee Lorenzen
    CEO, Altura Ventures — the first Facebook-only VC
    cell: 831-595-7501

  3. If the app developers are actually making money (this isn't clear, so we'll assume not), then each user is worth zero.

    Seriously, valuing numbers of users is pointless unless there is a demonstrable, market-driven correlation (i.e. more users => more revenue). Even Dave McClure, who has vigorously defended Facebook recently, is beginning to ask about monetization (http://500hats.typepad.com/500blogs/2008/01/fac… )

  4. […] a recent post, I looked at the numbers put out by Adonomics — a Facebook app consulting company — which argues that apps like […]

  5. Then what about funwall.in a similiar one operates in India having massive traffic?

  6. Then what about funwall.in a similiar one operates in India having massive traffic?

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