Thank you for your post detailing the launch of the fbFund. While you indicated that a more formal submission process if forthcoming, I’m curious to know what type of information is presently expected with application submissions. Any thoughts?

Thanks for your help,
Scott Himmel

This fbFund is great news for all Facebook developers whether they need the money or not. The reason is that it provides another validations that the smart money is looking to focus on facebook developers as the best avenue available today for owning a piece of the Facebook platform (short of marrying a facebook employee with tons of options).

As folks are looking at finding potential investors, we want to make sure that facebook developers have a sense of what their apps are worth. So, folks should take a look at the new Adonomics Valuation report by typing in any Facebook app’s name on the http://www.adonomics.com site and seeing what the valuation is.

For example, the app “I Am Hungry” went on sale on eBay with an initial minimum bid of $5,000.

http://cgi.ebay.com/ws/eBayISAPI.dll?ViewItem&item=290162896581&_trksid=p3907.m32&_trkparms=tab=Selling

As you can see they wisely set this down to $1,000 but with a reserve. This is a much smarter way to sell an app because our Adonomics Estimated Valuation for th app is $25K.

http://adonomics.com/about/2367258038

This number could go even higher if they provide us with the data to turn this number into an Adonomics Certified Valuation.

To calculation these valuations, Adonomics has just created a new service where we use:

1. available facebook data (e.g., active users, total installs, total facebook user populuation, total facebook active users, facebook’s historical growth rate),

2. estimated and/or app provided metrics (e.g., canvas pages views, app users’ reachable via the notification API and/or profile page updates, unique visitors per month, time spent on canvas page, current CPM/CPC/CPI ad revenue levels and/or opportunities, app’s new user and active user growth rates)

3. assumptions about Facebook’s growth rate and the app’s new user growth rate extrapolated over certain forward looking time periods, in the app’s case, influenced by the size to the app’s install base compared to other apps, the age of the app on the platform compared to other apps of similar age, the category of the app, the competiveness of the app’s category, etc.

4. projections relative to ad revenue for the coming 12 months based on expected growth in CPM/CPC/CPI rates over time and with additional user targeting and then applying best practices WRT managing an app’s ad real estate (e.g., testing all ad platforms such as AdBrite, back-filling all available app real estate, creating new ad real estate that enhances app stickiness, cross-promoting opportunities, targeting an app to an attractive end user ad demographic, targeting an app to an appropriate ad sponsor)

5. other variables that relate to our own knowledge of app valuations based on apps we’ve purchased, developed, marketed via various existing ad networks and brokered to third party acquirers and/or ad sponsors.

Based on all of these data points, we come up with a valuation for the I Am Hungry app of around $25K. This is the number that we believe the app is worth assuming that the app is properly packaged for sale and the sales process
is managed in a professional way. Simply putting an app up on eBay and seeing what you get is, in our opinion, not how app developers will maximize their revenue.

Our goal at Adonomics and Altura Ventures is to help the Facebook developers win by helping them get a fair price for their apps. While we still advocate not selling an app too early, if an app developer does want to sell, then they should do so in a way that gets a value that is closer to what their app’s future revenue and profit potentials are.

We believe that the Adonomics Estimated Valuations and Adonomics Certified Valuations are a step in that direction. We will continue to enhance our methodology and formula to ensure that it ties to real world numbers. That being said, valuation is what buyer and seller agree to. So, feel free to sell your app for whatever you wish and feel free to contact us if you don’t think you are getting a fair price.

Thanks,
Lee Lorenzen
CEO, Altura Ventures — the first Facebook-only VC fund