Comments for MySpace Charging Developers for App Promotion

MySpace Charging Developers for App Promotion

2008-05-02T05:00:01Z

According to a Nick O'Neill at the Social Times blog, MySpace is charging app developers for the "featured" spots in its App Gallery, which it officially launched last week. The Gallery has featured spots for applications on its main page and on each of 22 category pages. O'Neill is reporting that the price of advertising on the featured spots is between $50,000 and $100,000 per week.

]]> So far, it looks like Slide has been the only taker and their applications occupy all four featured spots on the main page of the Application Gallery. "This is the first platform which has actively attempted to generate revenue directly from application developers," said O'Neill, who thinks that this could spell trouble for smaller app developers whose applications may be marginalized in the gallery by apps paying MySpace for extra promotion.

Facebook faced a small backlash from some developers last month when it appeared that the network was playing favorites with partners.

We noted in early April that MySpace was planning to put out joint press releases with app developers. Giving app developers access to the Fox Interactive Media PR machine was an unorthodox step but it showed developers that the company was serious about pushing apps developed for its platform. Any goodwill that may have been built with developers though, might be lost if MySpace starts playing favorites with well-funded, larger app companies.

App spam, which has been a problem on Facebook, is another issue that MySpace may need to contend with. We're all curious how they will deal with it once the applications platform grows (MySpace currently has 1,000 apps in their Gallery, compared with nearly 24,000 at Facebook); we hope their solution won't be to charge premium access to advertising in the "Friend Subscriptions" feed.

That said, paid advertising for apps within the the confines of the Application Gallery seems pretty benign. It's not much different than application developers paying to place Social Ads on Facebook (something that Facebook encourages on their ad sales page). As long as MySpace makes sure that paid promotion doesn't come at the expense of other applications in its Gallery, they should be fine.

What do you think of MySpace charging for premium real estate in their Application Gallery? Fair game or does it spell trouble for smaller app developers? Will it discourage some developers from utilizing natural viral channels? Let us know in the comments.

Comment from Chris S on 2008-05-01

2008-05-02T05:10:00Z

MySpace will never get it, will they. They are already facing dwindling interest from developers and with HI5's full application implementation, MySpace is becoming like Microsoft or Yahoo where they are always doing the opposite than what users or developers want.

Comment from Mircea on 2008-05-02

2008-05-02T08:07:14Z

Who has $50,000-$100,000/week to spend for this?? (according to socialtimes.com)

Not smaller developers, that's for sure...You can start a company with this amount!

So, most of the pie will belong to companies like Slide or RockYou...

Comment from jape on 2008-05-02

2008-05-02T09:55:06Z

I signed up for a MySpace opensocial developer account months ago. Still nothing.. Signed up with another email... nothing! That's not the way you attract developers... and then charge them: come on!

Comment from Hussein Fazal on 2008-05-02

2008-05-02T14:05:06Z

I have tried to make a mathematical ROI analysis to this 50-100k investment and have calculated it will take about 1.5 years to pay itself off. Please have a look here: 'MySpace Featured Apps. Mathematical Analysis - Is it worth $75k?' and let me know what you think!

Comment from dc crowley on 2008-05-02

2008-05-02T15:33:51Z

These jerks will never ever learn. Which is fine by me if they would just disappear sooner rather than later.

An aside (MySpace being owned by News Corp.): I am not too worried about Yahoo being bought by Microsoft. But if Microsoft needs News Corp. to push the deal through then there will be big problems. That is when I would start looking for alternatives to Yahoo services.

Comment from DevlinD on 2008-05-02

2008-05-02T20:48:19Z

This is totally fair game. North Americans have basically been spoiled with free stuff and have to realize that this is where the model is headed and eventually as all social networks fail to find other ways to monetize it will be this way everywhere.

Traditional advertising doesn't work on social networks, even Google can't get it right. Brands are looking for the most effective way to reach customers in the social space and groups, branded pages, and efforts like SocialAds just aren't it. The highest rate of engagement for users on social networks is found in applications. Why do you think apps like FunWall have millions of users while branded pages and groups are extremely lucky if they gain a few thousand members? Nobody cares to be marketed to while engaging in social activities plain and simple. However if brands and other app developers with advertising business models create engaging applications that draw anywhere from tens to hundreds of thousands of users (potentially millions) then why wouldn't they just build a free application instead of paying for advertising that is largely ineffective.

There was a great post written here a little while ago (http://www.readwriteweb.com/archives/meebo_advertising.php)
that basically said just that. Create an engaging experience and people will not only tolerate, but embrace advertising as long as it provides a meaningful experience. As long as MySpace and eventually other social networks make a clear distinction between sponsored applications and applications that have risen through the natural viral ranks, how is this any different than paying for sponsored search results on Google? Granted I think that $75k a week may be a little steep, but if applications are generating revenue at a pace to support that then it is a win-win for the platform provider as well as the developer.