When viewed against the total universe of Facebook applications (numbering in the tens of thousands), the subset of financial applications is by all measures a tiny one. Most are related to “financial entertainment” – simulators, games, and “just for fun”
apps enabling users to buy and sell their friends, or send virtual gifts such as
bailouts or stimulus packages
. The reason for this is evident: Facebook is first and foremost a SOCIAL network - a means for people to connect, share, and have fun, and in general people would rather do just about anything else than manage their finances.
Yet the mass migration of social life to cyberspace continues, and virtual life will increasingly reflect real-world human needs: identity, self-expression, and interaction - social, political, and economic. Virtual economic interaction is currently the space
which is undergoing the most intense transformation and growth, and we believe that significant opportunities exist given (1) the need/desire to integrate economic activity within the social web, and (2) the desire to monetize social networks.
The movement away from an ad-driven monetization model toward one which relies on a high volume of tiny monetary transactions continues to gain significant traction. Companies such as
have recently posted multi-million dollar revenues derived in part from microtransactions in so-called virtual goods, items which enhance user profiles or avatars within social networks, virtual worlds, or social games. We believe that Fb Credits
will provide Facebook with equally outsize revenues and will produce even greater results as the company leverages the social graph. We believe Facebook intends for Credits not only to facilitate e-commerce, but to provide a form of communication, to augment
the overall social nature of the site. That is, Credits could become a medium of user interaction which transcends simple pay-for-service transactions by encouraging a new social financial framework. Facebook’s recent
and perhaps even across the social web.