On Monday, researchers at the University of Maryland’s Robert H. Smith School of Business released a report confirming that Facebook is good for the economy. At least, its apps are.
The study, led by Associate Professor of Information Systems Il-Horn Hann, found that Facebook apps have contributed at least 182,744 new jobs and $12.19 billion in wages and benefits to the U.S. economy. Not bad considering that Facebook itself employs only about 2,000 people.
According to the study, the Facebook Platform launched in 2007 with 85 applications available to its 20 million users. Today, Facebook has over 750 million users, who install 20 million apps per day. For the big app companies, this can mean big money. According to the report, social gaming giant Zynga has roughly the same number of employees as Facebook and is valued at $15 - $20 billion dollars. Between their 49 Facebook apps, among which is CityVille, which AppData reports as Facebook's most popular app, with over 74 million monthly active users, as of September 19. Altogether, Zynga’s social games attract over 49 million active users a day.
The University of Maryland study took into account jobs that have been created within the app industry, as well as jobs in other sectors of the economy that either support the app industry or influenced by app developers’ increased spending power. Facebook's app developers make money either through advertisements within the app or special app features that require Facebook Credits to unlock (one U.S. dollar equals 10 Facebook Credits).
According to the report, Facebook hasn’t only created new jobs, but it's helped kickstart an entirely new industry: companies who develop apps for other companies. Facebook even helps companies find an app developer through their list of 90 Preferred Developer Consultants. Each of these development companies employ engineers, designers, sales people, administrative assistants, and office cleaners.
The numbers from the University of Maryland study probably only represent a fraction of the jobs that have been created because of Facebook. As the report states, there are several components of the Facebook Platform, and this study only looks only at apps that are built directly on the platform. What they admittedly don’t take into account is that a large component of the way websites integrate with Facebook (10,000 new websites integrate with Facebook every day) is through social plug-ins such as the “Like” button. It’s likely that the “Like” button drives jobs creation by increasing the profits of highly-liked businesses, which in turn allows them to expand, hire new people, etc.
"Our findings confirm that social media platforms have created a thriving new industry," Hann said in a statement on Monday. "As Facebook and other platforms grow, we will continue to see job growth and the ripple effects of these advances in the U.S. economy."
To put this in perspective, in July Apple announced that downloads from their App Store had surpassed 15 billion, with $2.5 billion (or 70 percent of the revenue) going directly to developers.
While these young "app economies" are flourishing, the U.S. jobs crisis is worsening overall. On September 16, the Associated Press reported that a majority of states saw unemployment rates rise for the third month in a row. That same day, New York Mayor Mike Bloomberg issued the following caution on his radio show, according to the Boston Herald: “We have a lot of kids graduating college, can’t find jobs [...] That’s what happened in Cairo. That’s what happened in Madrid. You don’t want those kinds of riots here.”
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