New Generation of Practical Apps Launch on Facebook's Platform

Gaming companies have become entrenched on Facebook's platform, while non-gaming apps have for the most part not broken through. But a new group of more practical, utility-like apps is starting to emerge. In the last few months, we've seen a spate of Facebook-connected job hunting sites, professional referral services and e-commerce apps launch and raise money. Facebook investor Accel Partners recently backed e-commerce startup Yardsellr in a $5 million round and chipped in on a $6 million Series A for job search startup BranchOut. Another company, Stik, which helps users find lawyers and realtors based on the social graph, also opened to the public last month. And Kleiner Perkins Caufield & Byers recently launched a $250 million social fund on the premise that all industries will be redesigned from the ground-up around people's relationships. "Any kind of interaction where a person is making decisions based on trust is an area where Facebook can help facilitate," said Nathan Labenz, who co-founded Stik, a site where people can log on with Facebook and pull up mortgage brokers or lawyers connected to friends. Yet, three years on, Facebook's platform essentially has only three breakout areas -- gaming, marketing and local group deals. Third-party Facebook integrations are promising and widespread, but cosmetic. The company's popular social plug-ins help users find content shared by friends, but have yet to fundamentally alter the experience of reading a news site, for example. Most of the startups that came out of Facebook's fbFund incubator haven't seen broad traction outside of successes in social media marketing space like Wildfire Interactive. Labenz says that unlike social games, many of these applications rely on making two-sided markets and Facebook has only just become a truly mainstream product with north of 550 million users -- enough to support critical mass for these types of services. On top of that, viral channels were well-suited to push notifications about daily use apps like social games. Apps designed around rare but high-value situations would get crowded out, he said. Facebook has since pared down viral channels over the last years, making it harder for non-gamers to hear about new games. It also simplified its graph application programming interface, giving developers a more consistent way to access a wide range of user data from photos to events and people. "It's not surprising that games would pioneer use of the platform," said Daniel Leffel, an eBay veteran who founded Yardsellr. "I definitely am somebody who views what's happening with Facebook as the beginning, not the peak." His company is an online marketplace that uses Facebook to connect buyers and sellers. "Commerce is inherently a trust-driven exercise and having a real identity tied to a Facebook profile lends itself to this really well," Leffel said.

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New Generation of Practical Apps Launch on Facebook's Platform

Kim-Mai Cutler

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