Rev2.org - Latest Comments in eBay Auction for Facebook App Yields Good Results

Re: eBay Auction for Facebook App Yields Good Results

mark — Mon, 08 Oct 2007 03:57:41 -0000

Shouldn't the title of this be changed to "Ebay auction leads to 'questionable' results (not 'good')?

Re: eBay Auction for Facebook App Yields Good Results

Mark Mayhew — Thu, 04 Oct 2007 02:38:19 -0000

So that this discussion may make more sense to you, please allow me to invite you to install the "I am Hungry" app, so that you, too, can laugh your ass off!:
http://www.facebook.com/app...

Re: eBay Auction for Facebook App Yields Good Results

Jesse — Thu, 04 Oct 2007 02:24:52 -0000

Mark,

I've explained this about half a dozen times before and in fact it's answered right in the auction's Q&A section: it says "no reserve" because they change the structure of the auction and eBay doesn't allow you to change the description of an active auction. No conspiracy there.

You can call "I am Hungry" worthless until the cows come home, but the developers of "I am Hungry" are now $20k richer. The reality of the situation won't change no matter how annoyed you are that such a "worthless" app got that kind of money.

You've now gone from "no reserve" to "definitely a $5k reserve" to "maybe there was a reserve, maybe there wasn't." The reason you can't pin down a position is because you have no facts to back up your argument. All evidence points to the simplest conclusion: The "I am Hungry" auction had a reserve, as the Q&A section clearly says, and people were out-bidding themselves in order to suss out the reserve price.

Re: eBay Auction for Facebook App Yields Good Results

Mark — Thu, 04 Oct 2007 01:52:09 -0000

Ask Dan if you want the reserve price, donâ€™t just speculate. You donâ€™t know what it was and the information is not available publicly.
It says "no reserve", maybe there was a reserve, maybe not. Bottom line, who knows, who cares? Bottom line is that "I am Hungry" is a worthless steamin' pile of doggie dooof an app, that whomever owns it,and at whatever price they got it, is going to be a laughing stock!

Re: eBay Auction for Facebook App Yields Good Results

Jesse — Wed, 03 Oct 2007 18:05:32 -0000

Mark,

2) The market is the final determiner of valuation. They "I am Hungry" guys got $20k, the fact that you think it's only worth $50 doesn't change that. The buyers obviously thought they were getting a deal.

3) We didn't make anything off this sale. We contacted Dan after he originally posted the auction to let him know that if he restructured it he could make much more than he would otherwise.

5) Ask Dan if you want the reserve price, don't just speculate. You don't know what it was and the information is not available publicly.

Re: eBay Auction for Facebook App Yields Good Results

Mark Mayhew — Wed, 03 Oct 2007 16:16:48 -0000

1) The original auction was created with no reserve and was hovering around $1.5k-$1.6k
2) After talking with us as Adonomics the developers of â€œI am Hungryâ€ realized they would be underselling if they kept it at this price.

Are you kiddin' me? At $50, they would be gettin' more than the "I am Hungry" app is worth.

3) We advised them on how to restructure the deal (a refund for developer time spent and payment to come in installments) in the hopes that it would increase the price.

Gee, how brilliant, I guess this is why "consultants" make the big bucks?!
And Lee doesn't "write" overly long posts, he "copies and pastes" his overly long posts.
5) People outbid themselves in an attempt to just barely surpass the now-hidden reserve price.
"Just barely"?! Since when is bidding $20K, when the reserve is $5K, "just barely surpassing?!

Re: eBay Auction for Facebook App Yields Good Results

Jesse — Wed, 03 Oct 2007 14:05:39 -0000

Mark,

I'm Jesse, the CTO and creator of Adonomics. Lee has a tendency to write overly long comments, so I'll simplify the timeline for you:

1) The original auction was created with no reserve and was hovering around $1.5k-$1.6k
2) After talking with us as Adonomics the developers of "I am Hungry" realized they would be underselling if they kept it at this price.
3) We advised them on how to restructure the deal (a refund for developer time spent and payment to come in installments) in the hopes that it would increase the price.
4) In addition, Dan et al. added a reserve price to the auction. eBay doesn't let you change the description so the auction still said still said "no reserve."
5) People outbid themselves in an attempt to just barely surpass the now-hidden reserve price.
6) The combination of (3) and (4) led to a winning auction of just over $20k.

Everything is legit.

Re: eBay Auction for Facebook App Yields Good Results

Mark Mayhew — Tue, 02 Oct 2007 23:55:26 -0000

Thanks for all the support/kind words. This will be interesting to see how this plays out over the coming weeks and months, I can't imagine that the participants will ever admit to engaging in a phony auction, what will get them, in the end, is how the "I am Hungry" app develops (or rather, doesn't develop).
For the hell of it, I installed the "I am Hungry" app...it is as simplistic/worthless an app as I have come across, it might be worth $50, on a good day.
And notice how Lee Lorenzen, Facebook's #1 Cheerleader remains silent (after copying and pasting that nonsense above).

Re: eBay Auction for Facebook App Yields Good Results

James — Mon, 01 Oct 2007 17:08:26 -0000

Jeepers, I think you guys are right. Bidding history is definitely dodgy :-\

Re: eBay Auction for Facebook App Yields Good Results

James Thomas — Mon, 01 Oct 2007 10:16:41 -0000

Good catch, Mark. I think they also just sullied their entire business (NishNash.com, if its even a real business).

Re: eBay Auction for Facebook App Yields Good Results

Sid Yadav — Mon, 01 Oct 2007 08:55:48 -0000

Mark, after looking at the bidding history -- you have me convinced!

Wow, the things people do...

Re: eBay Auction for Facebook App Yields Good Results

Mark — Mon, 01 Oct 2007 02:42:14 -0000

silly rabbits, you all don't really think that was a real auction, now do you?! It's so obviously a phony auction, I go into detail at:
http://www.facebook.com/top...

Re: eBay Auction for Facebook App Yields Good Results

Sid Yadav — Mon, 01 Oct 2007 00:57:32 -0000

Hey Lee,
Thanks for stopping by -- very interesting what you guys are doing (and have done). I think this just shows how much money there is to be made here.

If I were a developer, I'd do nothing else than spend the next 20 days building cool Facebook apps!

Sid

Re: eBay Auction for Facebook App Yields Good Results

Lee Lorenzen — Sun, 30 Sep 2007 21:36:49 -0000

James,

I'm Lee Lorenzen, CEO of Altura Ventures -- the first facebook-only VC and interim CEO of Adonomics.

As I said in my post a few days ago, when I first saw the I am Hungry app on eBay:

http://blog.adonomics.com/2...

===
A current example is the app â€œI Am Hungryâ€ which originally went on sale on eBay with an initial minimum bid of $5,000. Had someone bid this amount, the app developers would have been forced to sell their app without fully exploring its potential value. As you can see in their current eBay listing, they now have put in place a hidden reserve price which is hopefully closer to what Adonomics projects the value to be:

http://cgi.ebay.com/ws/eBay...

In my opinion, if you are going to sell in an app on eBay, this is a much smarter way to do so because our Adonomics Estimated Valuation for the â€œI am Hungryâ€ app is $25K.

http://adonomics.com/about/...

This number could go even higher if the app developers provide Adonomics with the data to turn this estimated number into an Adonomics Certified Valuation.
==

After my post, Dan Peguine put a link to the Adonomics valuation at the bottom of the auction listing and Altura Ventures did what it could to spread the word about the app and our view of its value being much higher than the $1500 to $1600 range. I also advised him that an installment sale was a better structure because it would allow the buyer to re-coop the price overtime from the advertising potential that the app represented. Since Dan didnâ€™t need the money right away and since his Intellectual Property would come back to him if he wasnâ€™t fully paid, it was an easy way to get the bidding to go beyond the $1600 range.

In the last hour before the auction ended, the bidding jumped over $20,100 (which met Danâ€™s new reserve price) and effectively ended the auction.

As you mention, this is particularly impressive for an app with only around 600 active users and fits in with Altura Venturesâ€™ view that the total install base of an app and the square inches of the 250,000 usersâ€™ profile pages that â€œI am Hungryâ€ controls is worth a significant amount.

IMHO, had â€œI am Hungryâ€ received an â€œAdonomics Certified Valuationâ€ by providing their Google Analytics data it is likely their valuation would have gone up significantly and this might have led to even a higher price.

In any case, this bodes well for all facebook developers and I also want to announce that Adonomics will be offering to all facebook developers that want to sell their app a brokerage service where we will do our best to help them get prices at or near their Adonomics Valuations.

Had we provided this service for Dan, I would have suggested that in addition to offering an installment sale approach and getting an Adonomics Certified Valuation that they should have shifted the app into something that showed the logos of the restaurants that their hungry users were thinking of going to. In addition, they should have had a default restaurant choice be something like the â€œMcDonalds â€” Iâ€™m Lovinâ€™ Itâ€ logo or â€œOutback SteakHouseâ€ or â€œApplebeesâ€ logos showing on the userâ€™s page. This way there would be a Letâ€™s Eat Out app that would have shown each friendâ€™s restaurant choice/logo on 250,000 profile pages.

Iâ€™m confident that Adonomics could have sold this app for $100K to $250K to the ad agency for McDonalds in a sponsorship deal that would have been lovinâ€™ it if they could have instanly been on the home page of 250,000 users who were too in-active to change their resturaunt setting. And, because this is part of the app itself, it wouldnâ€™t even be a violation of facebookâ€™s TOS about no ads on the profile page.

If you are a developer with an app to sell, friend me and message me in facebook with the particulars about your app and then feel free to give me a call if you have questions at 831-595-7501.

Thanks,
Lee Lorenzen
CEO, Altura Ventures â€” the first facebook-only VC

Re: eBay Auction for Facebook App Yields Good Results

colbert — Sun, 30 Sep 2007 21:35:01 -0000

I really don't find all this Facebook app craze so interesting.