Facebook's growth has begun decelerating. In April 2008 Facebook traffic declined 10%, dropping from 24.9M to 22.4M unique visits. Furthermore, year over year growth declined from 98% to 56%. During this same time, LinkedIn jumped 361%, propelling it to the 4th largest social network destination.

Trouble is brewing for Facebook, and it smells like a bubble.

A large part of this failure is that Facebook has become, well, ugly. A profile page is starting to look like a myspace page. Facebook realizes this, and is even preparing for a profile page redesign. Yes, MySpace has nearly 3x as many unique visits. But with 3% year over year growth, this shouldn't be the model that Facebook follows.

Another part is that Facebook doesn't provide incentive to developers. While spending time and resources on developing an app is great and all, you currently can't make money directly off of those apps. There is some serious competition as well -- currently 26744 other applications. Of which, the top 20 applications account for the sheer majority of installed apps. This leaves tens of thousands of other applications practically unused.

Facebook Monetization Strategy for Photos

But Facebook can turn this boat around. For example, they are the number 1 photo sharing site on the web, with 13M photos uploaded daily. In fact, Facebook states that their photo application draws more than twice as much traffic as the next three sites combined.

Yet, if you have ever used the photo application, problems abound.

• You can't upload/download full-size photos.
• You can't send the photos to a printer from the website.
• You are limited in the number of photos per album.

Such are the problems that many practice the Flickr-Facebook solution -- pay to host your full size photos on flickr and then post the most relevant ones to Facebook for easier sharing for free.

Opportunity! Facebook, start charging for premium photo application services. Partner with digital photo developers and get a cut. It really is that simple.

Facebook Monetization Strategy for Developers

Facebook, allow developers to make money off their applications. This will attract talent and ideas to the table seeking fortune, not just fame. And the Facebook community will self-select the best apps -- it is a survival of the fittest at its finest.

These have to be a better idea than the traditional advertising model, no matter how great it targets profiles. And even if not, then augment your current portfolio. It's called diversification and investors love it.