January 24, 2011

Facebook Could Extend Advertising Beyond Social Games

A Facebook executive said on Monday that the company sees opportunities to extend its advertising business beyond the gaming sector.

The social networking site is already challenging Internet giants like Google and Yahoo for users' time online and for advertising dollars. 

Facebook built a significant advertising business for social gaming, thanks to companies like Zynga.

"For a company like Zynga, Facebook is absolutely the most efficient advertising platform in the world," business director Dan Rose told the DLD media conference in Munich on Monday.

"Games tend to be a leading indicator," he said. "As more and more categories become social, certainly that's an opportunity for us from an advertising perspective.

"We're in the middle of a transformation. We're moving from the information web to the social web. We're moving from the wisdom of crowds to the wisdom of friends," he said.

Rose was asked whether media companies needed to move beyond integrating their sites with Facebook to experiment inside Facebook itself.  He replied:  "Maybe, we'll see."

He said that the social networking site had no current plants to develop Facebook Credits, used to purchase virtual goods for use in Facebook games, for use in the real world.

"It is a virtual currency and it was designed specifically with virtual goods in mind," he said.

According to documents circulated this month to potential investors by Goldman Sachs, Facebook made a net income of $355 million in the first nine months of 2010 on revenue of $1.2 billion. 

Facebook is the largest social networking site, holding an audience of over 500 million users.


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