Eric Eldon of VentureBeat writes:

I don’t usually write about Facebook applications — there are tens of thousands of them, and few gain or maintain significant traction. But, Social Change is worth a mention because it has an interesting business model. Built by Dank Apps, Social Change is a set of vertical applications based around certain causes, like curing breast cancer or AIDS, or stopping climate change.

These applications generate advertising money that is then donated to the cause in question. New York-based Dank Apps, of course, is a for-profit business and its bigger plan for making money is directing users of Social Change applications to another application, Lotto. More on that in a second.

After users add one of the applications, they can gain “karma points” by inviting friends, sending gifts, and other actions on the app — really, anything that keeps the user active. Dank Apps donates a couple cents to a charity every time an application is installed, then donates more money based on how lucrative the application is, with “karma points” roughly translating to the amount that Dank Apps donates.

The apps are focused on verticals that are attractive to higher-end advertisers and brand sponsors and so generate relatively high CPM advertising. Because the apps are places where users can both talk about causes and make money for the causes, the usage rates are relatively high (although the apps themselves just launched, and only have a handful of users).

As Nick O’Neill of All Facebook points out, others have tried variations of this strategy without success but were more complicated; one erstwhile competitor required a download toolbar, for example.

Lotto, Dank Apps’ other Facebook application is already cash-flow positive. Instead of a real-life lottery, where you pay to play, you invite your friends and take other actions in order to earn tickets (not unlike Social Change’s “karma points”). But Lotto only has a few thousand active users because, as Dank Apps founder Jason Beckerman tells me, it’s difficult for users to understand that it’s free just through receiving an invite. By advertising Lotto through its other applications, Beckerman hopes to see a significant new wave of users eventually playing Lotto.

Tags: The Lotto

Beth Kanter writes:

Tags: The Lotto

Nick O’Neill of AllFacebook.com writes:

The causes application has been up for almost a year now but many critics have complained about the lack of money earned for each cause even though millions of users have become supporters. “Support the Campaign for Cancer Research” has attracted over 3 million users and $61,440 has been donated. This amounts to approximately $0.02 per user. Dank Apps attempted to find a solution to this problem and came up with a set of ad supported social change applications.

Users earn money by generating karma points through inviting friends, sending gifts and participating in the community. As you earn more karma points, the donation goes up. Since launching yesterday, the Earn for Breast Cancer application has generated almost $63 wial ith only 212 users. If enough users join this application, it actually has a chance at generating substantial money for charities.

There have been other attempts at this on Facebook but so far they have failed. One of the breast cancer awareness applications required that you download a toolbar to earn money. The only problem with that is nobody wants a toolbar on their computer. As such Dank Apps thinks they have a solution. If the 3 million members that added the Campaign for Breast Cancer Research on causes, the application would generate $60,000 just for the users adding the app. After interacting with the application, significantly more could be generated.

If you want to help bring change but don’t want to make a donation, go install the Earn for Breast Cancer application, Earn for Aids application or the Stop Climate Change application.

Tags: The Lotto

TrenchMice.com writes:

I spoke with Dank Apps CEO Jason Beckerman this afternoon regarding the evolution of the company’s LOTTO application in a more socially responsible direction. Beckerman stated that the company’s designers and management saw consumer psychology as the primary cause for the static growth of the online lottery application. Dank Apps unveiled the Social Change application today in an effort to move their LOTTO application away from “survival of the fittest” toward a philanthropic tool.

Social Change is an application designed to harness the power of social networking for charitable means. Each accepted invitation to this Facebook application will offer two cents to the applicable charity. Beckerman said that the first three charities supported by Dank Apps are Stop Climate Change, Earn for Breast Cancer and Earn for AIDS. Users who are concerned about the morose nature of some of these charities can play mini-games while earning money for their favorite causes. The product had 50 users within an hour of its release this afternoon according to the CEO.

I asked Beckerman how long the Social Change applications took to develop. Beckerman stated that the initial run of charities and mini-games took six weeks. The CEO stated confidently that the Dank Apps team could launch similar applications in a two-day period in the future. A new set of three charity applications will be up in two weeks and a total of nine new applications will be out by the end of this month. These charities will include Earn for Darfur, Support the Troops and other organizations addressing multiple sclerosis and autism.

The most startling revelation during my brief conversation with Beckerman was that the team could get an application up and running in a matter of 48 hours. The old LOTTO application may seem simple on its face but there are many technical problems that can arise with thousands of Facebook users. The fact that application users interested in one charity will likely support other charities shows the far-sighted nature of Dank Apps. A horizontal approach to virtual philanthropy plays off the company’s former problem with group psychology while creating a demand for other socially responsible applications.

Tags: The Lotto

FacebookWidgets.com writes:

The Lotto application, created by Dank Apps has received $250,000 in funding from Bay Partners. I previously covered AceBucks receiving an additional $200,000 in funding from the Bay Partners AppFactory fund. So what is the Lotto application? It’s pretty simple. Every day users can get a ticket to be entered into a lotter drawing. At the end of the day, cash is awarded to the participant who’s ticket is drawn. Where does this cash come from? Advertising.

Apparently enough people are clicking on ads that they can afford to give out $400 a week. This new Lotto application is going to eventually have some components that are directly integrated into the AceBucks application. As Michael Lazerow, CEO of Buddy Media previously suggested, their arrangement with Bay Partners was set up so that they could integrate AceBucks into each of the applications that received funding. It appears that this is one of those applications.

I am interested to see the response from others in regards to this announcement. So far, the majority of applications that are receiving funding are not necessarily the golden applications that I have frequently discussed. Instead, applications that attempt to distribute gold by turning their applications into marketing channels are the ones that are receiving funding. This contrasts to typical Web 2.0 sites in which the product is king. In the world of Facebook applications, creating channels for marketing before developing robust products is what’s important (at least that’s what it appears).

I have spoken with other venture capitalists that have disclosed to me investments they have made in other applications, a few of which have been more utility focused. For the most part though, investments in Facebook applications is still rare. There are nowhere near as many Facebook startups receiving funding as there are general web startups. It will be interesting to see if this trend continues. If you want to play the daily lotto on Facebook, go check out The Lotto application.

If you want to learn more about getting funding, go check out the DankApps website to learn more about the company that build the Lotto.

Tags: AceBucks, The Lotto

Rating:
I had a chance to meet the founders of The Lotto Facebook application while at the graphing social facebook conference a few weeks back. You can learn more about the Facebook Lotto application here.

Anytime you can dangle a carrot of free money in front of people they will beat a path to your door. The Lotto has done this in a big way with a facebook application. They actually launched about a month ago on facebook and have a steadily growing user base. They give away prizes on a very regular basis and you can see who wins.

These are some sharp NY guys and I really enjoyed meeting them. They also just released some really cool new features today for the Lotto. They promised that the app will continue to improve and get more functionality; it has continually improved since they launched it.

This is a very smart application that has tons of monetization opportunities. I like the fact that they share the revenue with their users. Sweet! The Lotto application has lots of different types of lotto cards that you can give to your friends. I am sure the entertainment value of the app will be great… people always want free money.

As I said in my interview with them “I wish I had this idea and had executed on it”. It is already proving to be a very popular application.

Tags: The Lotto