Intersecting Minds: Education, Business and Technology at the North Carolina State Jenkins Graduate School of Management

Facebook Finds A Potential Revenue Source | October 23, 2009

Since its inception in 2004, Facebook has struggled to find a way to make money. The social networking giant may have found its remedy. Bloomberg has the story:

The company is testing a payment system to gain a cut each time an online-game player buys a digital tractor, weapon or hat on the site. That would give Facebook a piece of the hundreds of millions of dollars that are being pulled in by Zynga Inc., creator of “Farmville” and “Mafia Wars,” and Playfish Inc., maker of “Pet Society.” The social-games market will almost triple to $2 billion by 2012, estimates ThinkEquity LLC.

Skimming the microtransactions that make up the social games market could be the answer for Facebook. I’ve long thought that eventually Facebook would need to go to a fee-for-service model of some sort to generate a steady revenue stream and positive cash flow, but then they would face a huge backlash from their user base. Now it appears as if Facebook has a way out, particularly if they can figure out the credit system discussed in the article.

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