5 Money Making Opportunities on Facebook

With the release of its platform, Facebook’s recent endeavor in social media presents a unique opportunity for marketers, developers and businesses to tap into the social network’s young, active, and viral crowd.

However, over the past few weeks there has been a rising concern among developers to uncover ways to monetize their Facebook applications. The curse of instant online success is that you can no longer sustain expensive servers to support hundreds and thousands (or even millions) of Facebook users. The question: how can the developers of Facebook apps actually make money? We don't have all the answers yet, but here are 5 suggestions:

1. SELL. Develop applications solely for the purpose of selling them to interested parties. Several applications have already been acquired in this fashion; the most recent example is that of Mozes’ purchase of TextMe.

2. DEVELOP. An indirect source of funds: develop applications under contract for third parties. A number of companies have been posting contract jobs over at the Facebook’s developer forums. There exists a large gap in the supply and demand of available Facebook application developers; as a result, finding potential clients to charge reasonable rates should not be a hassle.

3. ADVERTISING. Use advertisements, cross-promotion schemes and affiliate marketing. It is not feasible to use Google Adsense for this since Facebook does not allow JavaScript embedding. Adsense may be embedded through iFrames, which despite being popular among Facebook developers, is against Google’s TOS. Affiliate marketing is a great alternative to advertisements; my own source of income on Facebook is generated through Amazon’s affiliate marketing.

4. MICROPAYMENTS. Sell services within Facebook through micro-payment transactions. PayPal payments made for accessing premium services could potentially yield reasonable income depending on the application’s purpose, size, and prospective users.

5. GET INVESTMENT. If you think you have something big on your hands and lack the funds to scale it, apply for investment through Bay Partners and others who have expressed interest in funding Facebook apps. This would be the likely course of action for a startup with plans to expand globally within and beyond Facebook.

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Facebook has a huge active community. It is reported that of the Many active users, about half log in each day. This is a rarity among Web 2.0 companies (comparatively, Google Videos has about 3% active users). If Facebook can convince its users to shell out $1 to send those silly virtual "gift" images to each other, then surely a clever developer or startup can find other approaches to earning money from a Facebook application that do not involve just drowning their users in ads.

Due to the pace of innovation over the web, it is imperative that companies jump on opportunities like these as they turn up. LinkedIn and Bebo are expected to release their own set of developer APIs as well; I personally cannot wait to be among the first to tap into that opportunity. I advise others to start planning as well.