September 29th, 2009
Courtesy of The Silicon Alley Insider , an interesting look at the relationship between Facebook and social games leader , Zynga. As the article notes:
“…Sources say Facebook advertising is “beating the s— out of its numbers.”
One big reason? Social games maker Zynga.
Making Facebook games like FarmVille and Texas Hold’em and then selling its users virtual goods to help them advance in the games, Zynga is pulling revenues over $500,000 per day, All Facebook reports.
To keep that momentum going, Zynga then turns around and spends a big chunk of that money — “a reported $50 million,” writes All Facebook — on Facebook ads.
For years, tech industry watchers wondered if any American startups would ever make money selling virtual goods the way many companies in Korea and Japan do. Now Zynga and Facebook are marching toward IPOs on the back of that suddenly booming business.
Lots of Facebook insiders think the company could double-dip into this burgeoning virtual goods economy by building a “Pay With Facebook” PayPal-killer. But recent reports suggest that a payment platform is at least a year or two off.
All Facebook reports this profitable relationship between Zynga and Facebook is also a very cozy social one. Whatever it takes!”
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