The Facebook Economy - High School Didn't Prepare You for This

Posted 09/29/2009 at 10:20am | by Paul Lilly

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Your Econ class probably never covered Facbook, but maybe it should. According to the Silicon Alley Insider, Facebook is "beating the s--- out of its numbers," and it's all thanks to Zynga's virtual goods.

Farmville, Texas Hold'em, and other social games are turning out to be cash cows. By some estimates, Zynga is pulling in a staggering $580,000 per day, with a good chunk of that coming from selling its users virtual goods. To ensure the well doesn't dry up, Zynga has spent a reported $50 million on Facebook ads.

"Zynga is an aggressive player in this space … possibly the most aggressive," writes AllFacebook.com. "There is two parts to their strategy. The first is to fund developers that have game ideas, promote them, and for those that are successful, they snatch them up, often at pennies on the dollar. The second is outright acquisition of successful application that they didn’t fund."

While Zynga has proven that selling virtual goods can be booming business, the future looks even brighter. There's talk of Zynga and Facebook teaming up to build a "Pay With Facebook" payment system that would both take on Paypal, and allow the companies to cash in twice on selling virtual goods.