As Facebook Becomes the New Face of the Web, Boston-Area Startups Pitch In

9/27/07Follow @wroush

In three years, Facebook has grown from a project in a Harvard dorm room to the seventh-most-trafficked site on the Web. Three years from now, if the company succeeds with its strategy to cultivate Facebook versions of typical Internet applications from e-mail and photo-sharing to games and music playlists, Facebook will be the Web, or at least a self-sufficient microcosm of it.

And, putting aside any angst over why the founders left for the West Coast, local Web companies eager to siphon off a bit of Facebook’s audience are happy to help it grow. Some, like streaming-music provider Finetune, have created so-called Facebook “apps” that merely tap into their existing core services or put a social spin on them, while others, such as Cambridge-based ride-finding service GoLoco, exist entirely inside Facebook.

Their efforts are part of a genuine transition in the way the Web works. It’s a change that started a few years ago with the emergence of so-called Web 2.0-style “mashups,” or fusions of complementary Web services. But it has only been underway in earnest since May, when Facebook launched the “Platform,” a so-called application programming interface or API that allows outside software developers to build programs that interact with Facebook’s 40-million-strong collection of personal profiles. Suddenly, if you’re an up-and-coming Web startup, it’s no longer enough to provide a compelling, stand-alone service—say, a free music player and playlist-building application, as in Finetune’s case. To get on the map, you have to use the Platform to turn your service into a Facebook app.

Over the last week, I’ve spoken with execs at several Boston-area startups doing exactly that, for one clear and incontrovertible reason: traffic. “Eighty-five percent of college students are on Facebook, and 60 percent of them are on it every day,” observes Peter Glyman, co-founder of Framingham, MA-based Geezeo, a personal finance website I profiled in August. “If you want to reach that demographic, you’re crazy not to leverage that as a resource,” says Glyman.

Geezeo’s iWant Facebook AppSo, on September 18, Geezeo rolled out iWant, a Facebook app that lets users set goals such as “save $400 for an iPhone” and encourages their friends to offer encouraging words or even cold cash, donated via PayPal. “Your good friends will boost you with words and comments, and your great friends will support you with cash,” jokes Glyman. A few hundred people have signed up for the service so far; Facebook apps tend to spread virally, as every time a member adds an app that fact is broadcast to their friends via a Facebook feature called the News Feed, stimulating more interest.

Facebook started out as a literal equivalent of the old-fashioned college facebook distributed to Harvard freshmen every year. It evolved into a social-networking and friend-finding site competing with MySpace, and is now becoming something much more. Salil Deshpande, a partner at Menlo Park, CA, venture firm Bay Partners, has called it a “social operating system”—a general platform for any application that revolves around groups of friends and acquaintances. By opening up the Facebook platform and giving developers special lexicons for interacting with it—the Facebook Query Language (FQL) and the Facebook Markup Language (FBML)—the company may have given up exclusive access to its members, but it has also vastly increased the functionality of its site. (Outside developers have contributed 4,600 Facebook apps, according to the most recent count by Adonomics, a site devoted solely to Facebook analytics.)

Glyman believes the change is just as significant as the Web’s previous spikes of social and technological innovation. “In the dot-com era, it was everybody getting out there and giving away their product in the hope of making enough volume,” he says. “Then there was the enterprise transition and bringing people back to reality and traditional commerce. Then there was the Web 2.0 movement and social networking that was all the rage. And now you’ve got these microcosms within social networking, especially Facebook, which is a phenomenon all on its own.”

In addition to Geezeo, GoLoco, and Finetune, at least six other Boston-area Web startups have released Facebook apps or are known to be working on them. The area even has its own dedicated Facebook application development company, FBFactory, which claims it can build an app in about five business days. See Xconomy’s full directory of Facebook apps from Boston startups here.

Newton-based Finetune just introduced its Facebook app on Monday. It builds on Finetune’s catalog of 2 million songs, which are licensed for free streaming over the Web as part of the personal playlists that are the site’s trademark. But it exploits Facebook’s strengths by allowing members who add the app to their profiles to create “social soundtracks” or jointly authored playlists together with their friends. The Finetune app also helps Facebook members personalize their profiles by adding a “Daily Special,” which shows friends what songs a member is listening to in the Finetune player at any given moment.

“We’re not just jamming Finetune into Facebook, but using the asset to build a much more Facebook-type experience,” says Martin Kay, Finetune’s CEO. Originally, Kay says, Finetune had hoped to negotiate with Facebook to provide the site with a built-in music player, a feature Facebook lacked before May. “We even scheduled a meeting, but a few days before we were going to go out to Palo Alto they announced the Platform. So we shifted metaphors and decided we’d go build a music app. Not only is it free to work with Facebook, but they’ll let you monetize it too [by diverting Facebook members to join outside services]. We are not by any means betting our company on that channel, but we felt like it’s somewhere we have to be.”

Matchmine’s MatchMeter Facebook appMike Troiano, CEO of Matchmine, tells a similar story. “We decided to build a Facebook app on the day they opened the Platform,” he says. “It was a no-brainer.” Matchmine (profiled here on Tuesday) has developed a service that makes it easy for content-based websites to tailor recommendations to a visitor’s personal tastes, as expressed in their “MatchKey,” a mathematical summary of their preferences in a wide variety of categories. On Wednesday, Matchmine introduced MatchMeter, a Facebook app that lets Matchmine users compare their preferences visually.

“If you and I were friends you might discover that I’m a 68 percent match with Mike on videos, a 94 percent match on movies, and a 32 percent match on music,” Troiano explains. “We think that app is going to be highly viral. And we knew we would need to build some sort of social networking component as part of our platform. But the world doesn’t need another social networking site, so it was fairly obvious what to do.”

According to local developers, building Facebook applications is fairly painless. While Facebook’s own core service is written in the PHP web programming language, the Facebook API is based on the common Web standard known as the eXtensible Markup Language, or XML. That means Web 2.0 companies can easily build apps that mediate between Facebook and their own services, which may be based on other programming toolkits such as Ruby on Rails. “Facebook being a PHP application doesn’t affect how you write your own application, which is really cool,” says Sonny Parlin, chief technology officer at Geezeo, a Ruby on Rails house.

On the down side, Parlin says, the Facebook Platform itself is evolving so quickly that an app that functions perfectly with the Facebook site one day might be broken the next. “They’re constantly updating the API, which means that it’s constantly a question whether or not it is going to work on any given day,” he says.

This can be an especially maddening reality for companies like GoLoco whose entire business is built around their Facebook app. Robin Chase, GoLoco’s founder and CEO, braved a few frustrating moments two weeks ago at the Web Innovators Group meeting in Cambridge, where her company was one of the main presenters. Facebook was running so slowly during Chase’s live demo of the service that it was almost unusable. (When Facebook is working, members can use GoLoco to arrange rides with each other. The app handles gas payments and even tallies up the amount of carbon dioxide not emitted thanks to each shared ride.)

“Facebook is hardly NASA-built,” comments Matchmine’s Troiano. “Failure is an option with Facebook, God love ‘em. But they’re working through some serious scaling issues, and we’ve found it to be more or less stable.”

Web users seem to agree. Every day tens of thousands of new members join Facebook, where they can use simple, viral tools such as the “Friend Finder,” which scans the address books of their Web-based e-mail services and helps them quickly connect with acquaintances who are already in Facebook or send invitations to those who aren’t. In the United Kingdom, Facebook’s traffic actually outpaced MySpace’s for the first time in August. While Facebook has a long way to go to catch up with MySpace’s traffic among U.S. web surfers, its page views did increase 5 percent between July and August, while MySpace’s dropped 20 percent.

And in a sign of Facebook’s commitment to the third-party-app model, last week the company launched “fBfund,” a $10 million fund whose administrators—venture-capital firms Accel Partners and The Founders Fund—plan to hand out no-strings-attached grants of between $25,000 and $250,000 to developers of new Facebook apps who haven’t yet accepted other capital.

“It’s amazingly brilliant,” says Glyman. “When you look at who is really capturing users and keeping them in their environment, I don’t think anybody is doing it better than Facebook, and the third-party apps are the icing on the cake, making their product even better. Now they’re even paying people to write them.”

“What Facebook is trying to do, clearly, is rebuild the Internet from a storefront in Palo Alto,” says Finetune’s Kay. “They are very focused, and they have the benefit of having seen Version 1.0 of the Net and being able to address the things that have caused problems for people, such as spam. If you look at the list of apps, there aren’t a lot of big brands there yet, but I think they will come—because if this continues to grow and retain the user base it already has, Yahoo and everybody else is going to want to be part of it.” Including the Web startups that, unlike Facebook, still call the Boston area home.

Wade Roush is Chief Correspondent and Editor At Large at Xconomy. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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  • http://www.lookery.com/ David Cancel

    Great article.

    At Lookery we’re not building Facebook Apps but helping Facebook app builders make money via advertising. I am based in Boston and my partner Scott Rafer is based in San Francisco.

    We’re still in private beta but have still managed to serve up 1/4 billion paid ads since July.

    http://www.lookery.com/

  • Pingback: Internet, Technology & Web 2.0 Business in Boston, Massachusetts « Tom O’Keefe

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