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Direct Payments Are Just The Beginning

The social developer summit, hosted by the Inside Facebook network, is in full swing in San Francisco today.

The constant events and news around social applications underline the importance and future of the industry. Social applications are leading the charge and are driving the evolution of online technology and digital commerce. However, they are still new and correspondingly, the ways in which they monetizeare all over the map. Matters are further complicated by the impending restrictions on the social platforms – the most prominent example being Facebook Credits. This makes it tough for developers to optimize or simplify their business models as they’re constantly scrambling to stay in sync with Facebook.

For a developer to bring an app to market and successfully monetize, several things must occur.

  • Find a market
  • Deliver value
  • Charge for value provided
  • Analyze & iterate product to meet demands
  • Reinforce customer relationships

Facebook credits simplify the ability to charge users as they offload all of the operational logistics of processing payments and storing customer’s payment information. However, they are more expensive than they first appear. In addition to the hidden costs, they also hamper the ability to control the customer relationship, analyze customer trends and choose the right business models.

The trend that we are seeing in response to Facebook’s moves is for developers to hedge their bets by developing external sites and their own relationship with users. Also, several networks are aiming to be the alternative platform and focusing on segments like social gaming. This trend should only accelerate as the industry matures and the platforms move to take even more control. In the meantime, feel free to ping us with monetization ideas – we’d be happy to give our outlook and suggest best practices. In fact, if you’re heading up to Seattle in a few weeks for Casual Connect, we’d be happy to sit down and talk through any payment or billing issues.

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