Virtual gifts are flying off of Facebook’s shelves. Since opening the Gifts store in 2007 millions of virtual gifts have been sent between Facebook friends using the Gift store alone. When words alone can’t express one’s feelings, a virtual cupcake, puppy, roll of toilet paper, bff charm or shot of tequila are just a click away.
Although virtual, the lion’s share of gifts cost actual money in the form of a Facebook-only currency, called Facebook Credits. Credits are purchased from Facebook by credit card at an exchange rate of 10 credits per dollar. Most gifts cost 10 credits, which equals one dollar, but like in vegas, credits likely spend faster than dollars and cents. How many dollars and cents the social networking site takes in is up for speculation.
Facebook hasn’t revealed exactly how much money it is making from the sale of virtual gifts, but Silicon Alley Insider recently guesstimated the breakdown of Facebook’s $550 million annual revenue, pinning $75 million dollars a year to virtual goods. From the July 2, 2009 Silicon Alley Insider blog post:
Earlier this week, we spoke to several sources who each have some insight into Facebook’s financials (none of them know precisely). Taking the sources’ input together, we’d estimate the company’s expected 2009 revenue this way:
- $125 million from brand ads
- $150 million from Facebook’s ad deal with Microsoft
- $75 million from virtual goods
- $200 million from self-service ads
Total: $550 Million
If the numbers are correct, in addition to being highly popular virtual gifting also represents a respectable amount of overall revenue. Looking forward, Facebook is experimenting with new ways for users to spend their Facebook credits.
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Just another way to spend your money on worthless things I guess many people don't know how to use their money.
Man…. I have to say I think that that's a pretty weird way to spend money. Now, I will be the first to admit that I am tight with a dollar, but buying make-beleive gifts is pretty out there. I guess in a way it's like buying a greeting card or something – just a nice way to let someone know that you're caring about them, but… frankly, I don't buy those either! I send e-cards (free ones) or make my own!
nice stuff! maybe i can sell all my old logo, icons and webdesigns on facebook. should anybody buy it and send it to a friend.
It's a great way to give and be sincere yet not spend a dime.
Great inspiring blog about how to use your money. Well i think face-book is effective marketing tool. Online marketing is really gaining rapid popularity. To promote our site or product we have to do advertising so that people should know about it. Even i used to promote my site and sell my product online through fullservicead and my business is really growing