Facebook made the announced metric change to "application engagement" from "application install" yesterday. As Fred Wilson noted, they reacted quickly to the market need for real information about the number of users as opposed to installs.
Facebook has two new metrics — daily active users, and most active applications. Daily active users is the raw data — how many users actually use the application. Most active applications is a percentage metric — the percentage of users who have installed it, who are using it today. Inside Facebook notes that the two most active applications are games.
This is a good change. It will:
- Discourage the development of silly one-use widgets like Vampires and encourage the development of applications that people find genuinely useful. I myself have tons of those silly apps installed… it's a defensive mechanism to ensure that they don't fill my notifications queue with garbage.
- Favour applications that produce engagement — productivity, entertainment and games, for example.
One metric that is missing is a duration metric. If a meaningful advertising model is to be developed for facebook, a valuable piece of information would be how long the user uses the application.