ZDNet has a guest post by Jawad Shuaib, developer of the My Favorite Books Facebook application.

Jawed shares how how is monetizing his simple book application using Amazon's 4% referral profit share, saying,

The opportunity to monetize applications was a result of Facebook’s decision to allow developers to display unlimited advertisements. On par with advertising as a source of income, some developers, like myself, have come to prefer the use of affiliate links (finding leads for eBay, Amazon, etc) instead. Part of the reason is that Facebook does not allow developers to embed JavaScript within their code; hence making it difficult to enable Google Adsense for the content. Moreover, as is the case with MySpace, contextual advertising is not targeted enough to earn sizable revenues.

My own application is a mashup between Facebook and Amazon API’s to recommend, share, and comment on books. The “My Favorite Books” application is designed to earn through the 4% profit earned off every successful referral to Amazon. Combine this with Facebook’s 24 million active users and a business model instantly emerges.

Monetizing Facebook applications [The Social Web]

Update: To learn more about building a Facebook application, you can visit the short walkthrough provided by Facebook.