Facebook has the largest amount of people spending the most time on their platform and now, despite massive early success with their platform-based advertising, they are looking to diversify. The method of this diversification? Facebook Credits.
Facebook credits are the platforms’ version of virtual currency and their viability got a boost this week as the largest application developer for Facebook has shifted entirely to a system of exchange based around the currency. Zinga, the developer of games like Farmville and Mafia Wars, now will base all transactions around the virtual currency. Facebook credits can be purchased in 15 currencies and through gift cards, on Facebook, and through Paypal.
Some commentators have suggested that Facebook Credits face long odds of becoming a success story. Given Facebooks’ dominance in numbers and consumer time on platform such pessimism seems unwarranted. There are large advantages to businesses in transacting in this alternative system despite the cut Facebook takes (30%). Facebook credits operate like chips in a Casino in that they are psychologically easier to use because they are stand-ins for real cash. In addition, so far, the number of paying users and revenue per user is up when using this credits system.
There are some interesting models for utilizing the credits systems even if you are not pushing a game through Facebook. Credits could be given as rewards for relationships or product purchases or as behavior incentives. However this system evolves, one only needs to look at the virtual currency system on Second Life to see how this system could be successful.
Check out the Facebook Hopes Credits Make Dollars from New York Times
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