Ronnie05's Blog

The Global Virtual Currency courtesy Facebook

Posted in Social context, media and advertising by Manas Ganguly on July 23, 2010

Profiling Facebook’s attempt at Virtual Global Currency: Unveiling Facebook Credits

Even while Facebook has crossed 500 million mark, it has lacked a consistent mechanism for turning the user/follower legions to dollars. Banner advertising in most cases doesn’t provide a worthwhile return on investment internationally.

With an eye on its revenue engines, Facebook has also declared that it will now roll its Credits programme beyond its Beta confines. The network-wide rollout of the virtual currency application would streamline transactions online and, in effect, pave the path to the world’s first global currency. It’s also going to help Facebook scale one of its last major economic hurdles – monetizing its millions of international users. Now translated into more than 100 languages, Facebook will do more than $1 billion in revenue this year

The potential implications of a virtual global currency are staggering, if not difficult to pin down precisely. Facebook users have already shown a willingness to shell out for virtual goods in online games like FarmVille and Mafia Wars. The software company behind these, Zynga, is expected to make more than $450 million this year, the bulk from virtual purchases. With a Facebook credits program, users both domestic and abroad may soon be purchasing real goods through companies that utilize Facebook Connect. The benefits of One-click purchasing for targeted Facebook ads could be enormous: Advertisers and social marketers might have unprecedented access to real-time data on spending patterns and international purchases. Mobile carriers stand to benefit, too, as international consumers are increasingly more adept at using smartphones for financial transactions. A virtual currency could also be a boon to entrepreneurs in developing nations. Consumers could use credits to purchase directly from artisans in Brazil or Thailand. That may require Facebook to ultimately abandon the dollar as its exchange root, but it certainly presents a unique opportunity for micropayments to blossom.

There’s increasing chatter about Facebook giving Google a run for its money. But in some ways it may also carry the torch once wielded by PayPal, which held a similar vision of a truly global currency.

3 Responses

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  1. […] redefining scope and this could be a strategic direction towards a global currency. Discussed in next my post) Possibly related posts: (automatically generated)Facebook nets 500million usersBy the numbers: Do […]

  2. […] it has been rocking the ad revenues for 10 years now. Facebook has two more aces up its sleeve: Facebook Credits which is on its way to become the first global online virtual currency and algorithim search which would be Facebook’s answer to Google’s Adword and […]

  3. […] $1 billion in sales from virtual goods this year, and approach $2 billion next year. Facebook had introduced Facebook Credits as a enabler of online transactions. Currently, there are more than 200 games and applications from […]

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