Will Facebook treat its developers like eBay has treated its sellers?

Much of eBay's success can be attributed to the thousands upon thousands of small mom and pop eBay sellers who helped start the site in the early days. These sellers helped eBay grow, and eBay wouldn't be where it is today with out them. eBay was reliant upon these sellers in the early days and because of this treated them for the most part fairly. By doing this, eBay was able to create a vast marketplace unrivaled in its unique content (you can find just about anything for sale on eBay). Nonetheless, as times changed and eBay's fortunes weren't growing as quickly as it would have liked, eBay began to squeeze these same sellers who helped make eBay what it is today. Many of these small sellers are now going out of business as eBay is making deals with large retailers like Buy.com, which disadvantages these many small sellers.

The reason I mention Facebook is that having been a small eBay seller who was squeezed by eBay, I see a possible red flag for many small developers making those quirky applications on Facebook (which can allow you to toss sheep at friends or play Scrabble). Although Facebook has opened up their site to allow developers to create applications, there are still many signs that Facebook will squeeze its developers as soon as it needs to keep its own fortunes growing. For instance, Facebook intermittently shut down the Super Wall application in the past month for a supposed violation of the privacy agreement (which reminds me of the time eBay pulled one of my listings for a listing violation). This is just a friendly warning to those developers spending lots of their time and money on developing these applications: as soon as Facebook needs to meet growth expectations or fails to make enough money to go public, your applications will be the first to feel the pain.

For eBay, it was just business as usual -- it needed to grow, and the eBay sellers were just in its way. For Facebook, the same thing is bound to happen -- history repeats itself, and it is unlikely that the big fish in the Facebook ecosystem, Facebook, is going to let other small fish live forever.

My only suggestion to the developers is to create a union-like organization that behaves similarly to PESA (Professional eBay Sellers Alliance) and try to negotiate deals with Facebook now before it is too late...

Thanks for reading and please subscribe to this post's rss feed. Also, if you do like it please bookmark/share it with one of the social bookmarking sites on the top right of the blog.