Virtual currency monetization and payments are hot on the Facebook Platform right now, and Inside Facebook has the exclusive on a new startup that is helping social network application and online game developers do just that.

Gambit, which has been operating in stealth mode for six months, is launching publicly for the first time today.

The company’s team – Noah Kagan, formerly of Facebook, Chris Smoak, formerly at Amazon, and Andrew Hunter, formerly at Ning – didn’t originally start out to build a payments company. Rather, the three have been building Facebook applications themselves since the Platform launched nearly two years ago. When they weren’t satisfied with existing solutions, they decided to build their own payments product in house, and opened it up to a few others to try. Because it was performing so well, they decided to shut down their other applications and focus on building out a payments service.

Now, Gambit is focusing on apps and games where there is user demand for virtual currency. Gambit lets users obtain virtual currency through a variety of methods, including direct payments through credit cards, PayPal, Amazon, mobile payments through Zong, and its own managed network of offers. Gambit manages the relationships with payment vendors, and handles all payment-related customer support. The company says integration with the Gambit API is very similar to that of other payment providers and should only take a few minutes.

Gambit’s co-founders say the company have spent the last three months focusing on three areas:

1. Optimization. First, Gambit tests which payment method is working best – if the app is mostly used by adults, credit cards or Paypal may work best; if it’s used mostly by high schoolers, mobile payments might perform better. Second, the company tests different price points – for example, should it give users the option to buy virtual currency for $19.99 or $20, etc.
2. Customization. All of the CSS is completely customizble for app developers who want to change the way the payment options look and feel. In addition, the service is localized into 15 languages. If users are in France, the payment options will be presented in French, and so on for Spanish, Norwegian, German, Turkish, and 10 others.
3. Transparency. Gambit’s admin tools show developers the details on how much they make on every transaction on a per-user level. This helps developers understand which users are the most valuable, and what users are doing.

The company says it is now working with School Vandals, myFarm, and several other top application developers, as well as destination websites like SmallWorlds. Overall, Gambit’s business is split roughly 40% Facebook, 25% MySpace, 25% destination sites, and 10% mobile. The mobile service is WAP based – Gambit has developed an iPhone version, but Apple does not allow third party payment integration on iPhone apps currently.

Chad Boyda, developer of School Vandals, said he’s seen improved monetization rates since implementing Gambit.

“We were able to change all of the colors, fonts, etc. to match the look and feel of our game which provided a more seamless integration into our game. Upon doing so we saw immediate jumps in conversion rates,” Boyda says.

In addition, Gambit is working on a subscriptions product that will be coming out soon.

At the end of the day, the virtual currency monetization/payments space is all about providing better results, customization, deep analytics, and high quality customer service. Gambit and current players in the space, including Offerpal Media, Super Rewards, Social Gold, Peanut Labs Media, SocialCash, Twofish, and Playspan, are all fighting to prove to developers that they can deliver on all those fronts. App developers are likely to continue to testing out different providers to see which work best for them.

Gambit has received angel funding and is based in Berkeley, California and Austin, Texas.

When Facebook users login today, they’re going to find something new – and, Facebook hopes, addicting – a real time stream of all their friends’ updates from across Facebook, the Facebook Platform, and Facebook Connect.

With the latest home page redesign, Facebook is adopting the “live stream” model that Twitter has made popular with several million users. Now, Facebook is bringing it to the masses.

Facebook’s intention with the redesign is to increase engagement and sharing by users. As Mark Zuckerberg wrote last week,

As people share more, the timeline gets filled in more and more with what is happening with everything you’re connected to. The pace of updates accelerates. This creates a continuous stream of information that delivers a deeper understanding for everyone participating in it. As this happens, people will no longer come to Facebook to consume a particular piece or type of content, but to consume and participate in the stream itself.

How will users react? When Facebook originally launched the News Feed for the first time in September 2006, users initially responded in a roar of protest, only to stop shortly later after realizing the power of the News Feed to deliver valuable information about their friends. Facebook is hoping the success of the “live stream” won’t be measured by user protests this time around. However, that kind of reaction is highly unlikely – Facebook users are now much more accustomed to the nature of syndicated sharing Facebook has implemented in the News Feed. While the original launch of the News Feed was the first time Facebook users experienced that dynamic, simply accelerating the pace of the stream this time around is a smaller change for users to understand.

Will Facebook eventually open up the public timeline, as Twitter has? Such a move would make Facebook’s sharing stream much more valuable to application developers and third parties interested in mining the data for market research purposes. While many have speculated that Facebook will eventually open the feed given its recent symbolic move to join the OpenID Foundation and open up new stauts APIs for application developers, Facebook hasn’t made any official announcements yet.

Now that the live stream is core to the Facebook user experience, developers and marketers should adapt how they think about getting the most out of their Facebook efforts. We’ve prepared detailed guides, and further screenshots of today’s release are below:

• 8 Ways the Changing Facebook Home Page Will Affect Application Virality
• Facebook to Launch Redesigned Pages for Businesses – Tour & First Impressions

Update 1:40pm PT: Facebook says the new home page is rolling out now, but it will be migrating users slowly on a rolling basis and “everyone should have the new home page over the coming days.”

New Facebook Home Page Screenshots

New startup AdNectar is helping Facebook Platform developers monetize their applications by connecting them with brands who want to reach Facebook users through sponsored virtual gifts.

The company, founded by former Stanford Graduate School of Business students Nir Eyal and Michal Bortnik as well as Vlada Breiburg and Julie Li-Eyal, recently released a paper showing that virtual gifts delivered through applications in its network increased purchase intent by between 20-60%.

In a recent campaign with Godiva, AdNectar says Facebook app users sent 1.1 million branded virtual goods, yielding over 52 million total impressions for the brand. Those gifts led to 77,000 clicks to Godiva’s fan page, and over 12,000 of them became fans of the page.

The campaign ran in applications like Friends For Sale, where virtual gifting adds meaning to the application experience.

“We’ve used AdNectar virtual gifts and found them to be well-received by our users. Gift-giving is an important activity in Friends for Sale and AdNectar has provided us with gifts that are timely, entertaining, and engaging,” said Charles Hudson, VP of Business Development at Serious Business, the developer of Friends For Sale.

AdNectar CEO Eyal says a main reason virtual gifts are valuable is they’re a rare form of advertising that users actually like receiving.

“The users always know more than the marketer about what they and their friends like.  Virtual items let the users find our target audience for us.”

For example, in another recent campaign for Sunkist, Eyal says, “It is likely that the sender knows that the person being sent the virtual item, enjoys soda, loves the brand, or loves orangey goodness.  In any case, that’s a target customer for our client and is something you just can’t do with a traditional banner ad.  The best part is, it’s all voluntary.  The user chooses to send the virtual item because they enjoy doing so.”

AdNectar estimates that 5 million virtual gifts are sent each day on Facebook – 90% of which are sent through Facebook applications. Facebook has been building out its in-house virtual gifting business lately, having recently launched new features like scheduled birthday gifts and holiday gifts. Late last year, it converted its virtual gifting economy to a “credits” system from US dollars.

AdNectar, based in Palo Alto, has raised a small round of funding from private and institutional investors including Battery Ventures.

As we approach the middle of March, several new apps are growing on the Facebook Platform.

Here’s the current list of Top 20 fastest-growing mid-sized applications on Facebook from AppData. These are the top apps in the 100K-1M monthly user range with the highest MAU growth in the last week.

Top Gainers This Week

		Name	MAU	Gain	Gain, %	Developer
1.		Get a Green Beer	864,605	+772,506	+838.8	Karlson NaKryshi
2.		Which NBA Player Are You?	561,271	+189,269	+50.9	—
3.		Super Pets!	967,020	+169,385	+21.2	RockYou!
4.		Streema Radio Tuner	155,930	+146,914	+1629.5	Streema.com
5.		The Unofficial “The Hills” Quiz	241,603	+123,503	+104.6	—
6.		Who Were You In A Past Life?	589,551	+113,435	+23.8	—
7.		Pet Society Gifts	107,321	+107,321	+0.0	Mona Liza
8.		Jeu de Seduction	796,453	+95,655	+13.7	6 waves
9.		Eres Atractivo	539,013	+93,832	+21.1	6 waves
10.		2009 Bracket Challenge	366,182	+88,572	+31.9	Watercooler
11.		Friends Oscars	280,201	+86,810	+44.9	Fendoo
12.		Are you spoiled?	215,532	+84,977	+65.1	—
13.		My Tattoo Wall	354,416	+78,644	+28.5	Make The Web Better
14.		\u0639\u06cc\u062f\u06cc	124,066	+76,841	+162.7	—
15.		Sei Affascinante	517,161	+67,214	+14.9	6 waves
16.		Send “Willow Tree” Angels	320,514	+61,360	+23.7	—
17.		SI Bracket Challenge	219,325	+57,894	+35.9	Citizen Sports
18.		Watch This Video	591,771	+56,626	+10.6	—
19.		\u00c7ekici Misiniz?	394,647	+52,293	+15.3	6 waves
20.		Praise Party	203,991	+51,203	+33.5	—

Coming in at #1 this week is Get a Green Beer, a St. Patty’s Day themed virtual gifting application, as you may expect. It’s grown from 0 to nearly 1 million active users in the last week alone.

“Whoever receives the most green beers by the end of St. Patrick’s Day (March 17th, 11:59pm PST) will receive $50 towards the purchase of your favorite 12 pack or anything else you want,” the application claims.

Also continuing to rise this week are NCAA tournament bracket apps, as Selection Sunday is close at hand. Watercooler’s 2009 Bracket Challenge has crossed 350,000 active users this week, while Citizen Sports’ Bracket Challenge has crossed 200,000. These apps are likely to grow much more next week as sports fans start building their brackets and making their picks.

Meanwhile, this week’s “hockey stick award” goes to Streema Radio Tuner, up from 7,000 to 150,000 active users in the last week. Streema is a social radio tuner app that lets users listen to a bunch of radio stations and share them with their friends.

As always, check out the latest info on who’s rising and falling on the Facebook Platform at AppData.

fbExchange, an early Facebook Platform ad network created by the team at 30Boxes, has been acquired by Traffic Marketplace, Om Malik reported recently. Terms of the deal were not diclosed.

Back in 2007, 30Boxes originally launched its calendar application for the Facebook Platform, and then helped Zach Allia scale his Free Gifts application before he sold it to SGN. At that point, 30Boxes started fbExchange.

“We have built full-sized businesses in the past but now we enjoy starting them and ultimately putting them in the hands of folks with more experience and drive to build them very big.  In this case it was a natural fit to find a larger more established network to grow fbX because we had no prior experience in the ad network world,” co-founder Narendra Rocherolle said.

President Jim Waltz headed up the discussions on TMP’s side.

If the number of social media marketing firms launching and expanding their Facebook Page management services is any indication, Facebook’s Pages redesign is a step in the right direction with the advertising community.

Just last week, Facebook announced that Facebook Pages (they’re now actually called “public profiles”) were being changed to look and act a lot more like Facebook profile pages: primarily oriented around content sharing and thus able to reap the benefits of the News Feed. (For more details on all the specific changes and what they mean for Page owners, see Inside Facebook’s Facebook Marketing Bible.)

Since then, there’s been a lot of discussion on the “page management” front because, well, there’s now more to manage – and perceptably more to gain from actively managing them.

For example, New York-based app-vertisement developer Buddy Media today announced the launch of its “Facebook Page Management Program,” designed to help advertisers integrate branded applications into their Facebook Pages. To date, the company has built Facebook applications for the likes of Budweiser, InStyle.com, FedEx, and others.

“App-vertisements will no longer exist as an island in the social world, but rather be fully integrated into an overall social media strategy on a brand’s Facebook Page,” said Michael Lazerow, CEO of Buddy Media.

In addition, New York and Boston-based new media consultancy The Advance Guard today enthusiastically announced its support for brands to actively embrace the new Facebook public profiles.

“With this rollout, everything changes,” the firm says.

Meanwhile, word of mouth marketing firm theKbuzz is encouraging clients to migrate from the old Pages to the new public profiles as soon as possible.

“We’re revamping all of our clients’ pages to work with the awesome new format,” the company says on their Facebook page.

In other words, more marketing firms are adding Facebook Page Management to their quiver of services for brands interested in both performance and brand advertising. That’s good news for Facebook, which made the changes to boost Pages’ importance to marketers. A large part of Facebook’s performance advertising business depends on businesses driving traffic to campaigns and promotions on Pages, so the company is likely to continue to develop them as it learns more about how the new public profiles are working for advertisers and users.

Facebook announced on the company blog on Sunday that 10-15% of photos users have uploaded to the site were temporarily unavailable due to a hardware failure. Tonight, Facebook says all those photos have been successfully restored.

While 10-15% may not seem like a lot, remember that Facebook crossed 10 billion user photos stored late last year and is the most popular photo sharing service on the web. Facebook says users are uploading about 850 million new photos each month, so the total number of photos on Facebook now could be over 14 billion. That means the number of photos missing was likely around 1-2 billion.

It’s one of the first larger-scale downtimes we’ve seen for Facebook Photos. Given that Facebook Photos is storing nearly a petabyte of data at this point and users are adding nearly a billion new photos to the system each month, the ops team seems to be doing a pretty great job.

Two weeks ago, Facebook’s “in house sociologist” Cameron Marlow shared interesting data with The Economist on Facebook users’ social behavior patterns – essentially, while Facebook users have many friends, they only actively communicate with a core group of them.

Today, Marlow has shared additional thoughts and data on the findings in his personal blog. A few highlights:

1) Facebook’s Data Team calculated the number of friends for whom users “maintain” Facebook relationships, where “maintain” is defined as having clicked on a News Feed story or visited their profile more than twice. Their findings?

• For those users with 500 friends, men maintain 7.8% of Facebook relationships, while women maintain 9.4% of Facebook relationships
• For those users with 120 friends, men maintain 15.8% of Facebook relationships, while women maintain 18.3% of Facebook relationships
• For those users with 50 friends, men maintain 18% of Facebook relationships, while women maintain 20% of Facebook relationships

2) The number of maintained, one-way, and reciprocal relationships scales on the order of 10% of total network size, as you would expect.

3) The News Feed is allowing more people to stay connected. As Facebook’s Marlow says,

The stark contrast between reciprocal and passive networks shows the effect of technologies such as News Feed. If these people were required to talk on the phone to each other, we might see something like the reciprocal network, where everyone is connected to a small number of individuals. Moving to an environment where everyone is passively engaged with each other, some event, such as a new baby or engagement can propagate very quickly through this highly connected network.

To get the full details on the Facebook Data Team’s approach and analysis, check out Marlow’s full post here.

For media companies evaluating their Facebook marketing strategy, here’s an interesting sign of the times: web analytics firm Hitwise is reporting that, for the first time ever, Facebook drove more traffic to PerezHilton.com than Google did in January – 8.70% to 7.62% of visits.

Furthermore, Liz Gannes over at NewTeeVee asked Hitwise for numbers on the US traffic Facebook sends to video sites overall. The answer? As of February 2009, Facebook is driving over 3.3% of all US traffic to online video sites.

In other words, Facebook is becoming a major content sharing and distribution platform.

According to Facebook, 28 million pieces of content (web links, news stories, blog posts, notes, photos, etc.) are shared by Facebook users each month. Through the power of Facebook’s feed system, these items collectively get billions of views as links are syndicated out to friends’ News Feed.

With the launch of Facebook’s new real-time home page this Wednesday, the pace of real-time viral content distribution on Facebook is likely to increase. Facebook certainly hopes that will mean more traffic to the applications and websites which encourage users to share content on their Facebook profiles.