As we speculated this weekend, Facebook has opened up its activity stream through a new API for developers. Now any developer can create new applications incorporating the real-time stream. One of the first apps to take advantage of this new API is Seesmic Desktop, A Twitter client which is now adding your Facebook feed through this API (something Tweetdeck already did in the past through other more restrictive means). Facebook has also created its own desktop notification client to demonstrate what can be built with the API.

I just got off the phone with Ethan Beard, Facebook’s director of platform marketing, who tells me that the entire feed will be available through a single API call. A developer could recreate the entire Facebook home page if he wanted to or take parts of the feed and remix it to make something more interesting. For starters, I’d expect most Twitter clients to add the Facebook stream as an additional option. On Tweetdeck, for instance, you can read your activity stream, but you cannot respond in-line. The new Facebook Open Stream API is two-way, so it would allow developers to build apps which allow for that two-way communication inside the app.

This is a big deal. It potentially puts Facebook side by side with Twitter in all of these desktop and mobile client applications where a lot of the real-time conversation is happening and lets it compete head-to-head with Twitter. Whichever conversation stream is more interesting will prevail.

But beyond the arms race with Twitter, the stream API will open up the possibility for many new applications both within Facebook and outside its walls. An obvious one would be better filtering options for your activity stream. It would be simple to create an app that shows you the most liked or most commented on items in your stream, for example. Or now that stream can be plugged into various social search engines to give you socialized real-time results. Hell, if I could just search my own activity stream, I’d consider that a giant leap forward. But Facebook still only allows developers to cache data for 24 hours, so you wouldn’t be able to build a very powerful search engine or return results from more than a day ago.