What’s in a bubble?

02Dec08

If you’re into technology you are aware that there is a frenzy underway in the world of mobile applications. Apple has opened the floodgates with their AppStore allowing mobile developers to finally build the kinds of applications they want and reach users at low cost. Google is fueling the fire with their Android Market and Blackberry is trying to help as well. If you didn’t know better you’d think this was finally the starting gun for the mobile software market.

Unfortunately, we’ve been here before you and I. Just over a year ago the same thing happened when Facebook opened their application platform. At the time it was heralded as the next generation of software – applications built right into social networks. The frenzy was intense as the barrier to write social network applications was low and distribution was free. Companies were funded to charge head first into the market and become the next billion dollar business.

While the story of social applications has not ended we now can see reality through the hype. It is hard to make money in social networks, especially if you’re just an add-on service. Heck, Facebook has enough trouble trying to make money themselves. There is money to be made but it’s far from an endless gold mine.

Exactly the same process is playing out in mobile applications today. Money is flowing into the market at a rate that is disproportionate to the size of the opportunity. In fact, the companies in the space look an awful lot like the darlings of the social application boom. If you were keeping score, these are your players:

	Social Apps	Mobile Apps
Top Developer	RockYou / Slide	?
Market Trend	Adonomics	AppShopper
Ad Network	RockYou	Admob
Analytics	Sometrics	Flurry

That isn’t to say that neither of these markets are real or that there will be big companies in this market. In fact, I tend to think that the mobile market will be a huge business as customers are still willing to pay for applications and hence revenue is easier to come by. However, I think it’s clear to any level headed observer that both are bubbles.

Just at different points in their lifecycles.

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