Apps for Facebook

The value of apps for Facebook was highlighted this month as Farmville creator Zynga filed for an initial public offering of stock (IPO). Zynga’s most famous and profitable offering is Farmville, one of the most popular apps for Facebook. The game is free to play, however virtual crops and other items can be purchased by users, which along with sponsorship deals generate revenue for the company. The IPO is set to be worth $10 billion dollars, making Zynga the second most valuable games company in the world.

The world’s most valuable games company is Activision Blizzard, most famous for the Call of Duty and World of Warcraft series of games. Both of these titles require years of development and sell for a premium price. Zynga’s model of offering games as apps for Facebook shows how profitable the medium can be. The only other comparable company to Zynga is Rovio, who produced the phenomenally successful smartphone game ‘Angry Birds’. Rovio was the subject of a takeover bid from Zynga earlier in the year but rejected it on the basis of the potential that it can see in the social games industry.

Of course not all apps for Facebook are games. There are over 500,000 apps for Facebook available. Many will be using apps for Facebook to promote their businesses and products this Christmas. Many will use their legions of Facebook fans to spread awareness of their products and services through apps for Facebook. These apps not only help companies spread awareness, but also allow the users to interact with the company in a variety of ways. Whether these companies can use apps for Facebook to sell their physical products with obvious tangible benefits as well as Zynga can sell virtual crops remains to be seen.