One of the biggest investment repellents in global business is when a country becomes unstable. If it seems like industry nationalisation or any other grand idea is likely to take place, investors disappear like rats from a sinking ship.
In its post “Facebook Takes Another Jab at Developers“, Allfacebook reported yesterday that by changing its interface and decreasing the visibility of third party applications without keeping its developers in the loop, Facebook is causing uncertainty among the developers for its platform.
Facebook isn’t alone:
- April, 2007: MySpace blocks PhotoBucket (it has since reversed its position, aquired photobucket and launched a platform of its own).
- August, 2008: Ning shuts down WidgetLaboratory.
What Facebook and other platform providers should do is imitate shopping malls. Instead of blocking applications or decreasing their visibility, they should increase their visibility.
Alfred Taubman, the shopping mall mogul, describes a mall’s layout like this:
You have two levels [and two escalators]. The customer comes into the mall, walks down the hall, gets on the escalator up to the second level. Goes back along the second floor, down the escalator and now she’s back where she started from. [The customer has] seen every store in the centre.
Why aren’t they doing this already? The answer is probably a classic one: Follow the money.
An application developer can make a bundle by creating a popular Facebook app, but how does Facebook make money off its platform? In a shopping mall, just as on other platforms like Windows, the customer is eventually charged. Facebook however, is free.
Further reading:
- Umair Haques Bubble Generation Strategy Lab. The most insightful, cynical Facebook coverage on the web.
- Catalyst Code, by David Evans and Richard Schmalensee. A detailed, interesting dissection of the platform business model.
Nice writing style. I look forward to reading more in the future.