Inside Facebook

Slide has signed a deal with actor Ashton Kutcher’s Katalyst Media to run a second season of online reality television parody KatalystHQ within its FunSpace application. The new season premieres today.

The first season of the show apparently worked for the two companies, both in terms of attracting a Facebook audience and revenue. While many Facebook developers have moved away from most forms of online advertising, this news suggests there are opportunities for companies that cleverly integrate products and services into content on Facebook.

KatalystHQ features short video episodes about life in Katalyst’s Hollywood headquarters; last season, it also featured a wide variety of product placements for its sole advertiser, Cheetos chips. For example, one episode included a Katalyst employee trying to buy Cheetos out of a vending machine — but the machine had a live cheetah on top of it. That season, 12 episodes in all, concluded last April. The premium advertising that Cheetos paid for typically costs in the hundreds of thousands of dollars, and is similar to the sorts of product placement ads also done by online video companies like Next New Networks, Deca and Revision 3.

The average video from the first season was shared by viewers with more than 65 Facebook friends, with more than eight million million people receiving shared videos in total. FunSpace, formerly FunWall, currently has 8.61 million monthly active users and lets people watch and share videos and other media within the app, and with their friends on Facebook.

This time around, the season will include 16 episodes, and a new advertisers: Nestle’s Hot Pockets microwavable foods. Slide isn’t revealing how much it’s making from the deal, although it notes that it is part of its new strategy to pursue premium advertising deals worth between half a million and one million dollars.

Bigger picture, Slide has also been refocusing to sell more virtual goods, including branded virtual goods from advertisers. It has 25.4 million monthly active users on Facebook spread between five applications, along with tens of millions more people who use its applications and widgets on MySpace and other social networks. The combination of steady revenues from virtual goods, along with premium ad sales like the one with Katalyst and Nestle, are driving the company’s revenues up three times above what it made last year. So, its decision to refocus from more traditional online advertising earlier this year seems to be working — at the time, it said virtual goods had already become 50 percent of its revenues.

Given Slide’s market position on Facebook and other sites, it is an interesting position. As it introduces out more virtual goods and premium advertising services on Facebook, it can play a leading role introducing these products to more large, mainstream advertisers.