What is a Facebook app worth?

by Mathew on January 11, 2008 · 10 comments

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.

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