Trend Watch 2010 :: The Monetization of Facebook

There is no doubt that Facebook has grown (rather rapidly) to be a formidable force in the interactive arena; with a stunning 450 million users worldwide, with millions joining each week, and a server ecosystem with 300,000 servers. Very clearly Facebook is here to stay. So much so, that in mid-March, Facebook became the first site to officially overtake the most trafficked site on the internet: Google.

But what of the future of the channel? What’s next on the horizon? You may be looking at it. Just recently, Facebook began working with the US Patent Office to trademark their monetization logo. They’ll soon be rolling out a Facebook Credits platform, which will take advantage of the tremendous purchasing capability within the channel. As of now, Facebook has been soft-testing the channel’s capability via virtual Facebook Gifts and virtual offerings in Facebook Games—to a tremendous success. So it’s only natural that Facebook would be looking at capitalizing on this success. And ultimately externalizing this capability to 3rd party companies. From the Patent and Trade Office, regarding the logo: F is Financial exchange services, namely, providing a virtual currency for use by members of an online community via computer and communication networks; facilitating the exchange and sale of services and products of third parties via computer and communication networks; incentive award programs; telecommunications services, namely electronic transmission of data, messages and information; entertainment services, namely facilitating interactive and multiplayer and single player game services for game.

What does this mean for the future of Facebook, and how does it translate into commerce? Imagine the logo showing up on Overstock, Amazon, Ebay, any number of e-tailers… Imagine capitalizing on Facebook’s extensive network and acting as a PayPal-like monetization engine—in fact, if realized, it will strike a blow to PayPal’s entry-level payment processing gateway for sites. It’s important to note that Facebook had actually ventured into these waters with their (quickly abandoned) Facebook Wallet program in May 2007; however, industry insiders noted that the program, in its infancy, “never got off the ground” due to program nascency and internal strife; not necessarily because the market wasn’t ready. It’s safe to say, it’s a little more adoptive of the concept now.