Anyone who uses Facebook has heard of Facebook Apps. Anyone who uses Facebook has been invited by a friend to install a Facebook app. Many of Facebook’s users have taken up that invitation. In fact, very many. So many that an entire small industry popped up that revolved around these applications. Companies were established that did nothing but create Facebook applications. Successful companies by the way.

These companies made millions and millions of dollars off of the successes of their Facebook applications and are still doing very well today. But just as fast as this micro industry was born, it’s more or less all but dead. Well dead at least for new comers.

When Facebook announced that it was going to open up its development platform so that outside developers could write applications that could be installed and used on the Facebook interface, the idea caught on extremely quickly, and if sheer numbers are any indication of success, did very, very well. Facebook application started to pop up all over the place, and like wildfire, many of the applications spread extremely quickly across the entire network.

Some of these applications ended up being installed by millions and millions of users and the companies that specialized in developing them exploded. Companies like RockYou and Slide Inc. (which was backed by the founder of PayPal), did so well that they’re now valued in the millions. RockYou now even has its own ad network that other Facebook developers can use to monetize their new apps.

The monetary potential of some of these applications was mind boggling considering they’re just widgets designed to work in another companies infrastructure. Now though, the money to be made through Facebook applications is all but gone. So what happened? Why did the revenue potential of the might app. go extinct?

Well firstly, there isn’t a lot of room for completion among Facebook applications. It tends to be a real first come, first serve kind of world. In the business world outside of Facebook, competition is always a threat and new entries have the potential to steal market share away from established mainstays.

On Facebook though, people tend to use what their friends use, and the adoption rate is so ridiculously fast, that first entries into any given niche tend to take hold and grow like weeds, choking out any possible competition. If you were the first guy to write a Facebook application that lets people post pictures of their dog’s butts on their friends’ walls, then you’re probably not particularly concerned about the second guy to write a dog’s butt application.

This can be seen by analyzing the most popular and most used applications. Almost none of them are duplicates of another concept among the list. Once one app. takes hold of a niche, it tends to keep hold.

Secondly, and likely most importantly, is that Facebook was initially very liberal on what it considered spam, and those days have changed. If you’re a Facebook user you probably remember the days when you’d log on each day only to find five more “invitations” from friends to install the newest widget that would allow you to send your best buds a digital booger or an e-fart or whatever.

You also might notice that now you receive much, much less of those invites. This is because initially, Facebook let applications be programmed so that users could invite as many people as they wanted to install. Naturally, Betty would install an application that she liked and in turn, with one click, she’d invite every one of the 1000 friends she’s attached to on Facebook.

The view was, it’s not really spam if it’s coming from your friends, and growth of the initial rounds of Facebook apps was lightning fast. Now though, Facebook has realized that people don’t enjoy being flooded with notices and invitations, and have severely limited the number of them that applications can send out. Invitations are now limited to 10, and notices are policed by users.

Too much negative reaction and your application will be labelled “spammy” and taken off the market. What this means for new entrants into the Facebook application arena is that growth is at a snail’s pace compared to the growth seen by the forefathers that paved the way. And that also means that the applications that established their major user bases are now essentially cruising along uncontested because the new limitations make it almost impossible for new competition to touch their massive user bases.

Still though, people flock to the Facebook developer platform in search of their fortune (the author isn’t innocent. I recently had an app. developed with fairly high hopes for its viral potential, only to realize the folly of my ways). It’s like a gold rush continuing on well after all the gold has been excavated. The vast majority will be disappointed, but some may actually do alright.

They won’t bring in millions like Slide and RockYou, but a respectable revenue stream is still not impossible. Just remember that if you are going to try and take on Facebook apps., you need to be prepared for slow growth, and under no circumstances should you try and compete with an established application. Overall though, the Facebook application directory is already super-saturated, and your time, effort and money could be spent much better focused on other projects.

The basis for this comment was that Google Docs has a collaborative function built in, and that using it over traditional word processing could help alleviate the back and forth sending of emails and attachments that has always come along with collaborative writing. I thought the idea was intriguing and decided to check out Google Docs for myself. I was quite pleasantly surprised.

Google Docs offers all the features necessary to draw up most types of documents you’ll write on a day to day basis. It lacks many of the features of Word 2007, but only those that are there as an extra convenience without being really necessary. If you’re coming from Word 2000, you probably won’t notice anything missing. You can save in a variety of formats including .doc, open document, PDF and HTML.

You can upload documents from your computer to edit and you can send documents by email or publish them right from the online interface. The feature that really makes Google Docs worth using though is the sharing function. Once you’ve created your document, you can share it with others and invite them on to be contributors.

Those added as contributors can then edit the document directly from their own Google account. Of course, as the “owner” of the document, you have the final say on edits. The value of this is that now on a document that might require three or four revisions from one of more people other than the author, the author of the document can simply upload or write their document in Google Docs and then invite in the editors or reviewers as contributors to the document. This could save a ton of back and forth emails with edited drafts attached, helping reduce the inbox clutter that often goes hand in hand with collaborative writing.

I’d suggest anyone that does any volume of writing check out this app., as there may be times when it makes your writing process significantly easier. By simply logging in with your Google account, you can access this useful web 2.0 app. completely free. I’d say this one is definitely one of Google’s winners.