Where I’ve Been for $3 Million, Please
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Written By Drupad Sil | August 17, 2007 | Share This
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Justin Smith at Inside Facebook today announced the acquisition of the Where I’ve Been application for $3 million by travel company TripAdvisor. There has been no comment from TripAdvisor yet, so there is no official confirmation; however, if the number is correct then this would be the largest Facebook application acquisition to date by far.
The Where I’ve Been application, developed by one Craig Ulliott, is the largest travel app on Facebook, and with 2.3 million users one of the more popular apps overall. In fact, the app leads TripAdvisor’s own Cities I’ve Visited app by about 1.3 million users. The price tag of $3 million values the app’s users at about $1.30 each and dwarfs the $60,000 paid by Slide to acquire the Favorite Peeps app back in June. Certainly, the price paid shows that there is value in developing apps for Facebook with a successful exit in mind. At the same time, the size of the acquisition marks Facebook as a legitimate platform for future development, and has probably spawned a couple thousand new Facebook developers, making this a winning situation for the social networking site despite the fact that it doesn’t see a penny from the transaction.
So just how high is the price paid by TripAdvisor? From Mashable:
“A quick check of Facebook shows the app debuted on around June 8: ignoring the high server costs and other expenses, Craig has made about $43,000 for every day his app has been live. Incidentally, that’s about as much as the average American earns in a year.”
The question really is, what now? As an avid user of Facebook apps, I tried out the Where I’ve Been app back when it was launched. After the joy plugging in where I’d been subsided, there wasn’t really too much else to do except eventually remove it from my profile page. Peter Kafka at the Silicon Alley Insider describes TripAdvisor’s situation:
“Mashable instantly declared this price “INSANITY!,” but this may be premature: many mere business plans are valued at more than $3mm, and Facebook had barely launched its app platform three months ago. Let’s assume there is indeed a way to monetize the users, via advertising or perhaps lead-gen. Then the key is attrition: If “Where I’ve Been” users do what many other Facebook app users do, which is try apps and then abandon them, the $3mm might indeed be loopy. If they stick around, however, and if the app’s growth rate is sustainable, then $3mm is a steal.”
The development to watch for is how TripAdvisor goes about monetizing this acquisition. Depending on how TripAdvisor makes out over the next several months, this could be either the tip of the acquisition iceberg or the iceberg that sinks the Facebook Titanic, and you can bet that it’ll be a closely-followed story among venture capitalists and large corporations alike. New and old apps alike should take notice that Facebook has recently taken action against the less-than-ethical tactics used by so-called “Black Hat” apps to spread themselves virally. More on this from Michael Arrington at TechCrunch:
“There are two ways application developers are breaking the rules to get new users. The first: When a user looks at an application on his/her profile the application can show something different than when other users view the profile. So a user adds an application that looks nice to them. But everyone else sees, say, a big yellow box with an advertisement that says the user wants you to add this application, too.
The second and more devious scheme is being used by many of the largest application developers. They all involve some sort of notification fraud. Generally, you add an application. Then, every one of your contacts is notified that you’ve ‘written on their wall’ or ‘have asked them a question,’ even though you never did. To view the content the contact must add the application. They then find out there is no wall comment, or its a canned question like ‘is it ok to kiss on the first date?’”
Facebook has responded by blocking developers from sending misleading notifications to users and preventing them from showing different profiles to friends than the one the user sees on his or her own page. If Facebook applications become a real money-making and outreach operation, look for more exploitive tactics and Facebook responses in the future. We have to wait and see how Zuckerberg manages the Big Bang of his site.
Topics: Investment, M&A, Social Media |
Hi Everyone…
We have not sold, we are actually looking to hire people and continue working on Where I’ve Been, if you would like to join me and you live in the Philadelphia area then please let me know:
http://www.whereivebeen.com/jobs.php