Facebook welcomes outside services

update SAN FRANCISCO--Facebook is finally opening up to third-party software developers--a move that comes three years after rival MySpace jumped to a staggering lead in social networking largely by throwing the doors open to outside services.

Facebook announced Thursday that the No. 2 social-networking site is allowing software developers to create applications, or "widgets," for Facebook users. MySpace executives may yawn, but Facebook is also going to allow other companies to open retail services and advertise on the site, Facebook founder and CEO Mark Zuckerberg announced at a media event here Thursday.

"You can serve ads...or if you don't want to advertise, you can just sell something," Zuckerberg told an audience of journalists and outside developers. "You keep all the revenue."

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This contrasts sharply with MySpace's philosophy. It's against MySpace rules for anyone other than MySpace to advertise on the site.

At the core of Facebook's new plans is the debut of Facebook/f8, a platform that allows anyone to build applications for social computing. The company is hoping that its 23 million monthly users and the opportunity to create for-profit businesses will attract developers to build a host of new networking services on top of the f8 infrastructure.

"Facebook is really trying to catch up technologically," said Emily Riley, an analyst with JupiterResearch. "They were lucky to build a loyal audience fast, but they don't have the media play that MySpace has. MySpace is the perfect combination of communication and new media."

Facebook has lagged behind MySpace in offering users a wide array of services that keep them engaged and spending more time on a site. The longer users stay logged on, the happier the site's advertisers.

MySpace was founded in November 2003, just three months before Facebook, but has accumulated nearly three times the traffic.

According to comScore, MySpace, which News Corp. acquired in 2005 for $500 million, saw 66 million monthly visitors in April compared with Facebook's 23 million.

Beginning Thursday night, Facebook announced that users will be able to equip their profiles with 65 new services, including photo slide shows (Slide), a music recommendation service (iLike) and a music player (Uber). A new video application will allow Facebook users to send video messages directly to friends within Facebook.

For many, Facebook has long been considered an online hangout for college kids, but Zuckerberg said the company is growing up. He pointed out during the press conference that now, 60 percent of Facebook's users are out of college.

During the press conference, Zuckerberg downplayed the possibility that Facebook's new open-door policy was late. He said that up until now, third-parties were allowed only to "drop some widgets" into a site.

"This is the first time that anyone has ever offered a platform that allows others to build full applications into a social-networking site," he said.

Nonetheless, Owen Van Natta, Facebook's chief operating officer, appeared to acknowledge that Facebook needed to one-up MySpace to attract developers.

"We needed a competitive edge," Van Natta said. "We want to create the most attractive site for developers to develop applications and a big part of that is to allow them to build businesses."

Riley cautioned that Facebook shouldn't pine to be the next MySpace. She pointed out that the Palo Alto, Calif.-based company grew a large audience by making it simple for users to communicate.

"Don't try to imitate MySpace too much," Riley said. "Make sure you stay true to what you do best today. Facebook is great for tight-knit communities and for people that already know each other offline. Facebook needs to remember that."

Facebook has long been rumored to be for sale. Asked whether that was true Zuckerberg said, "I've always thought that Facebook should remain independent and this just strengthens that."