Phil Sim over at Squash had an interesting post this morning about the Build-to-flip attitude and while in the general scheme of Web 2.0 it does no-one any favors, it may be the only sensible business model within the Facebook world of app developers.

Of course this comes in the wake of the purchase of Where I’ve Been by TripAdvisor which netted the originating author a cool $3 million; or as pointed out in a post by Mashable earned him the average American yearly wage each day for the time that the app has been running.

While Phil looks at it from the point of view of purchase value vs traditional advertising costs for TripAdvisor and considers this a win for the company; and as such there is a business model for future Facebook developers to consider I think it was also a win for TripAdvisor on another level as well.

Sure the concept Where I’ve Been might not have been one that TripAdvisor might have thought of on their own let’s assume they had. What would have been the development costs associated with creating the similar app?

You have to take into the account the cost of coming up with the idea - after all it has to happen on somebody’s paid time. Then either the hiring of a developer and/or team and any associated costs with that hiring. There is also the ramp up time needed for any new project and then the actual development time of the application. If you take into account the hard dollar costs of a project along with any of the related soft dollar costs that $3 million may turn out to be a hellva bargain.

But this isn’t just applicable to the Facebook internet but makes sense for the whole Web 2.0. After all when you can cherry pick from the best that has been created on some-one’s dollar why risk your own money. Google learned this with YouTube and is why Google Video is pretty well history.

In effect the whole Web 2.0 is becoming nothing more than software factories for companies like Google, Microsoft and Yahoo. The advantage that Google has here is that it isn’t tied with a ball and chain to existing platforms and software the way that Microsoft is; so it can act a little more nimbly because Microsoft always has to keep in mind on how any purchases might affect their product line.

For developer’s in this current Web 2.0 money rush really have little to lose as long as they can keep their VC angels happy because in the end if they succeed and get purchased by another larger company their worries about having to prove themselves as a viable income stream are gone. If they fail - oh well - on to the next software factory idea because in Web 2.0 failure is treated equally as well as success.

Conversation Tags: software factory, Facebook, Web 2.0, Phil Sim, Mashable