Inside Facebook

The number of big social applications that use Facebook’s virtual currency, Credits, continues to rise. The latest is Zynga’s smash hit farming game, FarmVille, the largest application on Facebook with nearly 84 million users a month.

The integration is pretty straightforward, as you can see from the screenshot below. Credits is shown as the first of several payment options — others include direct credit card payments, PayPal, and a variety of other payment services, including prepaid cards and offers.

Zynga has previously been running Credits in some of its smaller Facebook apps, like role-playing game Pirates: Rule the Caribbean. Credits is now also appearing on some of its other big applications, like pet-caring title PetVille. However, it’s not on others, including Café World.

However, Zynga, like Playfish, Playdom and most other social gaming companies on Facebook, is not running Credits exclusively. But another big developer is: CrowdStar.

Clearly, many developers are reluctant to make Credits the exclusive way that companies monetize through virtual goods on Facebook. Facebook takes a 30% cut of all transactions on Credits, whereas third party payments companies typically take far less. Credits could play a meaningful role in Facebook’s revenue growth over the coming quarter – we recently reported that Facebook revenues were $600-$700 million in 2009, and could hit $1.1 billion in 2010.

However, the more users who use Credits, the more it will become the de facto way that they buy virtual currency on the site — which could bring in a lot more money for Facebook. The company is going out of its way to promote this, doing things like featuring games that use Credits within its suggested games list within its Games Dashboard. Fine-tuning apps to include Credits may also make the currency more valuable. CrowdStar’s Peter Relan has previously told us that “once you get over the hump, it’s great, and just as profitable.”

Also, rumors have circulated for months suggesting that Facebook wants to somehow make Credits the only virtual currency available on the site, but we have not been able to confirm anything along these lines.

While Facebook has been widely testing it with app developers since last year, we expect to see new announcements coming about it relatively soon. The company is potentially planning to launch a couple other big initiatives at its f8 developer conference in April, including location services and the  “Open Graph” API. It’s possible that Facebook will use the event to further promote Credits — moving it from a now-huge closed beta test to an open one, for example.

Note: The future of payments in Facebook apps and social games will be a central topic at our upcoming Inside Social Apps 2010 conference on April 20th, the day before f8, in San Francisco. For more details, click here.