According to a New York Times article this morning, future cash flows may be questionable. The article compares the current ad reveneue being generated as similar to the gold rush when miners sold shovels to other miners. Michael Lazerow, CEO of Buddy Media (the company we broke the news about raising $1.5 million for Acebucks), was featured in the article as stating that “the pattern of Facebook applications relying on advertising from other Facebook applications is unsustainable.”
I couldn’t agree more and Michael Lazerow hits the nail on the head when he says that companies will be willing to advertise when they are able to reach the exact people that they want to reach. Even still, the New York Times article points out that even other Facebook developers are hesitant about the money that can be earned via Facebook applications. Only time will tell whether or not any of these applications are a sustainable business model. In the meantime, developers and entrepreneurs should enjoy the ride!