From Techcrunch: Facebook Platform Faces Rough Road Ahead

It comes as no surprise to me that the hucksters are out trying to huck each other into believing that there are millions to be made on the Facebook platform.  The disagreement, it seems, appears to be over how much money people are making.  Here’s a tip: when people are trying to convince you that there is money being made, run the other way.  What is this, a late night infomercial for a get rich quick scheme in real estate?  Sheesh.

There are two very critical and fatal flaws in the Facebook platform.

1. Network Effects Eroded - When your platform success is built on a community, a come one, come all approach to application development hurts you.  The Windows platform won because of the proliferation of applications, and no constraint that your enjoyment of the app was bounded by how many of your friends were using it.  The abundance of apps on Facebook has fractured the community to the point that each app looks like a ghost town, save a very, very select few.
2. No New Money - DHH would be proud to stamp this one out.  You cannot make money if there is no new money coming into a system.  Your success cannot be predicated on a pyramid scheme of VC dollars being syphoned into paying for user signups.  You don’t have more plants simply because you took them from one part of your garden and put them in another part of your garden.

Facebook itself was a study in the success of social applications.  They’re calendar.  They’re photo sharing.  They’re email.  You see a trend?  They should be like the government of old and handing out monopolies for broad application platforms.  Perhaps oligopolies, but that’s an advanced topic…