Inside Facebook

2009 will be remembered as the year that casual gaming stormed social platforms and changed the way millions of people socialized with friends online. With an up-to-$400 million acquisition of Playfish by Electronic Arts, hundreds of millions of dollars in venture investments, and some of the highest engagement numbers that online entertainment has ever seen, social games are now impacting businesses across the media landscape. It’s become clear that there are substantial opportunities for social game developers with virtual goods revenue models, but the market is still evolving rapidly.

Get the Annual Membership Get Annual Membership (Includes Report + 3 Additional Quarterly Issues): $2,495 OR Buy Single Report: $995

That’s why I’m excited to release today a new exclusive original research report with co-author Charles Hudson in our Inside Virtual Goods series that is exclusively focused on the future of the social gaming market, entitled Inside Virtual Goods: The Future of Social Gaming 2010.

How big is the market, and where will social gaming go in 2010? How will existing players fare as Facebook shifts the social gaming landscape, and larger and more sophisticated players enter the market? Inside Virtual Goods: The Future of Social Gaming 2010 provides deeper insight into social game monetization, development, customer acquisition, and the key questions facing the space in 2010 than you’ll find anywhere else.

About the Report

Inside Virtual Goods: The Future of Social Gaming 2010 gives you an inside view of the future at this critical juncture in the intersection of social networking and online games. The big picture? We estimate that the US virtual goods market will reach $1.6 billion in 2010, and that social gaming market will contribute $835 million of that total this year.

We have compiled months of original research from dozens of top executives and entrepreneurs from all parts of the social gaming ecosystem to produce eye-opening source data and analysis that is not available anywhere else. At over 140 pages, Inside Virtual Goods: The Future of Social Gaming 2010 takes the closest look at the present state of social games and the future of what’s shaping up to be a very fundamentally strong and profitable industry.

What We Cover

1. Emerging Social Game Development and Studio Models – There is an emerging consensus around how social game developers are choosing to organize themselves for game development. How do small, medium, and large developers organize their teams? What do development cycle times for original titles and “expansion packs” look like? What is the role of testing and metrics in the development process?
2. Social Game Design and Mechanics – The emergence of a few key game genres with proven mechanics and monetization have spawned dozens of fast followers. Understand how publishers are continuing to innovate as we head into 2010.
3. Monetization Data and Payment Trends – Now that developers have proven the virtual goods model, what are ARPUs really like for different game genres? What is the lifetime value of users, and how long do players stick around? We take an in depth look at monetization methods and rates, and shed light on where payments are headed in the coming quarters. One more note on monetization – you may be wondering about everything you’ve heard about offers and alternative payments for virtual goods. We cover:
   • The offers ‘scandal’ and what will it mean going into 2010
   • Changes that advertisers and payments companies have – and haven’t – made
   • How both direct and alternate payment methods are most likely to grow or contract in the coming year.
4. Customer Acquisition and Marketing Trends – As the social gaming landscape has evolved over the past two and a half years, so have the ways that developers acquire and retain new users. How have user acquisition costs changed, and what do Facebook’s changes spell for the future of the marketing funnel? We take an in depth look at data and trends.
5. Facebook’s Platform Changes, Credits, and What’s In Store for the Future – Just when social game developers were settling in, Facebook announced major adjustments that will dramatically alter the way social games reach users through Facebook. Continued change is likely – what will it be, and how will it impact the industry? In addition, as Facebook rolls out its much-discussed Credits currency, how will monetization and the payments landscape be affected? Finally, will we see another dominant platform emerge? Our overview covers these developments, their impact on the industry, and what else is in store.

What you get

In addition to our deep dive into key aspects of the social gaming ecosystem, the report also offers extended coverage on:

• A brief history on the evolution and growth of this space in the US, including a description of all key players and how they rose to the top.
• Total social gaming market size estimates for 2010, including estimates on the “big three” developers.
• Our take on the key issues facing the growth of social gaming, including our outlook and projections for 2010.

See the full table of contents below:

Table of Contents

Appendix of Related Companies includes: 51.com, 6Waves, Activision, AddictingGames, AdNectar, AdParlor, Amazon, AOL, Apple, Atari / Cryptic Studios, BigFish Games, BigPoint, Blizzard, Boku, Boomerang Networks, Crowdstar, DeNA, DoubleDing, Digital Sky Technologies, Electronic Arts, Facebook, Firecue, Friendster, Gambit, Gameloft, Glu, GMG Entertainment, Google, GratisPay, Gree, Green Patch, gWallet, hi5, InComm, Kaixin001, Kongregate, Live Gamer, LOLapps, Microsoft, Mixi, MSN, MySpace, Nexon, ngmoco, Offerpal Media, OpenFeint, Orkut, PayPal, Peanut Labs, Playdom, Playfirst, Playfish, PlaySpan / Spare Change, Pogo, PopCap Games, QZone, Real Networks, RenRen / Xiaonei, RockYou, Serious Business, SGN, Shanda, Social Hour, Social Reach, SocialGold / Jambool, SponsorPay, Super Rewards / Adknowledge, SupersonicAds, Target, Tatto Media, Tencent, The9, TokenAds, TrialPay, Twitter, Ubisoft, Viacom, VKontakte, Yahoo, Zong, Zynga

More Data, More Actionable Insights

In 2009, social games began to show what kind of value can be created on top of social networks. 2010 will be an even more important year.

Social gaming, powered by virtual goods, is this year’s industry to watch. If you’re involved, or are considering jumping in, Inside Virtual Goods will be one of your most important tools.

One year of original data and exclusive in-depth reports delivered on a quarterly basis is $2,495 and contains:

• A detailed overview of the current state of the industry
• Specific estimates on market size by segment
• Diagnosis of key opportunities and issues by segment

Get The Annual Membership

Get Annual Membership (Includes Report + 3 Additional Quarterly Issues): $2,495

OR Buy Single Report: $995

The annual membership, which includes the report and three additional quarterly updates, is USD $2,495. Alternatively, you can just download this report for USD $995.

The Facebook Developer Garage is coming to Taipei this weekend, where developers in one of Facebook’s fastest growing countries will be able to hear from Facebook itself and network with other developers in the country.

As we detailed last week, Facebook has seen incredible growth in Taiwan over the last 6 months, from 400,000 in June to over 5.4 million today. As a result, many developers in the country are taking interest in building apps and social games for the Facebook Platform, which is much more open when compared to other popular platforms in the region. However, we’re also seeing some interesting and different usage patterns amongst Taiwanese Facebook users so far as well.

This weekend’s Facebook Developer Garage will be on Saturday, 19 December from 1:00pm – 6:00pm at 資策會科技服務大樓創新廳, which is located at 台北市松山區民生東路四段133 號14 樓 in Taipei (Google Map). Here’s the schedule for the day:

Agenda

1:30 – 1:35 Opening
1:35 – 2:15 Facebook Brand Marketing by Alex Wu*, Facebook (In English)
2:15 – 3:05 Panel Talks: Opportunities and Challenges on the Facebook Platform

• 劉威廷, cardinalblue
• 大河馬, cacaFly
• Tony Wang, island7
• tempo, Gamelet
• moderated by Mr.6

3:05 – 3:20 Break
3:20 – 4:00 How Virtual Currency Works on Facebook by Nick Talarico*, Director of Publisher Development, Offerpal Media (In English)
4:00 – 4:40 Lightning Talks
4:40 – 5:30 Networking
* To Be Confirmed

The Garage organizers are expecting as many as 350 attendees. To RSVP, check out the Facebook Event.

To dig deeper into the virtual goods market, check out our new report: Inside Virtual Goods: The US Virtual Goods Market 2009 – 2010.

Startups Present Facebook Integrations at Le Web – European startups Stribe and Tigerlily won first and second places, respectively, at the Le Web startup competition in Paris on December 10.

Stribe lets you add social networking features to web pages, and includes Facebook Connect integration to help kick-start communities. Tigerlily is a tool set that includes contest and quiz widgets to customize a Facebook page, targeted to media companies and large corporations via free and pro versions.

RockYou Makes Staff Changes –  In an effort to boost its focus on brands at the Facebook app developer and ad network, RockYou made some management changes this week, shifting sales chief Lisa Marino to CFO while executives Ro Choy and Mihir Shah left the company to pursue other social media avenues.

The third-largest publisher on Facebook, RockYou has 52 million monthly active users in the U.S. for such apps as RockYou Live and MyGifts, with a total of 215 million worldwide users.

Broadcast Your Facebook Location — Gowalla has released Mobcast, an iPhone app that allows you to broadcast your location to all or chosen Facebook friends. While the app can constantly broadcast your location to friends, like Google Latitude, but must remain open to do so.

Florida Lawyers and Judges Can’t Be Facebook Friends – News broke this week of a ruling regarding judges’ use of Facebook by the judicial ethics advisory committee of the Florida Supreme Court. The committee ruled that it would “convey the impression” that lawyers who appear before judges were in a special position to influence a judge if the two were friends on Facebook.

Although, the ruling did say judges could post material on their social networking sites, for personal or electoral reasons, as long as it didn’t violate the state’s code of judicial conduct. More on this later.

Friendster bought by MOL Global Pte. Ltd. –  an affiliate of MOL AccessPortal Berhad of Kuala Lumpur , the compan agreed to acquire the social networking site this past week.

The two partnered in October to create Friendster Wallet and a payments platform enabling micro-spending for the 115 million Friendster users and under the new deal the operations of both companies will combine to create Asia’s largest content, distribution and commerce network.

MOL operates and develops and operates payment systems in more than 75 countries worldwide with more than 500,000 payment channels, over 4.5 million transactions per month that process upwards of $200 million dollars a year, according to the company’s web site.

We have written in recent months of Facebook’s growth in Southeast Asia. As we near the beginning of 2010, that trend does not appear to be slowing down. Throughout much of the region (except in China, of course, where Facebook is blocked), usage continues to rise. Some countries have seen incredible growth – Taiwan, for example, has added 5 million new monthly active Facebook users in the last 6 months alone – nearly 25% of the country’s total population.

What’s driving this growth? Increasingly, we’re seeing more users adopt Facebook in order to – you guessed it – play games. But not just any games – in many cases, games built by the growing number of Asian developers and publishers deploying titles on the Facebook Platform.

Taiwan is an interesting case study. Six months ago, very few people were using Facebook in Taiwan (under 400,000, according to our Global Monitor report). Today, that number stands at over 5.4 million (!). Developers in the region say that nearly everyone joined Facebook in order to play games like Happy Harvest, published by 6 waves, Pet Society, and Restaurant City. We’ve heard reports of local restaurants giving out Facebook Happy Harvest coins to customers who eat there. There are relatively advanced systems for distributing virtual currency already in place, and these are migrating to Facebook quickly as well.

Increasingly, we’ve been hearing stories of Chinese development shops being recruited to build (or license) their games for Facebook – even though very few people in China can actually access the site. These developers started off building apps for Xiaonei, Kaixin, QQ, or others, but because of the “guanxi” business culture that makes it harder for developers to strike business deals with platforms, more Chinese developers are increasingly turning their attention to Facebook. These developers see more opportunity to build on an open platform like Facebook than face the often-brutal business terms offered by the Chinese platforms if they become popular. As a result, there is increasing demand for talent to build and port Facebook games in the region.

But people joining Facebook in order to play games are using Facebook differently than those elsewhere. Often times, users join Facebook for the sole purpose of playing “social” games – not sharing authentic information with their friends. As a result, we’re hearing about many cases of players adding thousands of Facebook friends who they don’t know in real life, just in order to play Facebook games with them. These users post less photos and less meaningful status updates, because they’re not using Facebook for communication with their real life friends as much.

That could mean mixed things for Facebook going forward. Obviously, Facebook is happy to be growing throughout Asia, where it competes not only with local social platforms, but also heavily with Yahoo, MSN, Orkut, and Friendster, which are popular in different parts of the region.

But fundamentally, Facebook has always articulated its value proposition as a more efficient way to share information in a trusted way. Personal data shared by Facebook users is what makes the News Feed – the core of Facebook’s information distribution system – so compelling to hundreds of millions of people. In cases in which the News Feed is filled with content from random gaming friends, it’s quite possible that Facebook could see much lower retention rates from its core features over time, instead more heavily relying on games to drive engagement and growth. If that were to indeed be the case on a wide scale, that could present some tensions for Facebook’s core product design – and business – over time.

More In-Depth Resources from Inside Network:

• Inside Virtual Goods: The US Virtual Goods Market 2009 – 2010
• The Facebook Marketing Bible: 50+ Ways to Market Your Brand, Company, Product, or Service Inside Facebook
• Inside Facebook’s Best & Worst Facebook Marketing 2009
• The Facebook Global Monitor: Tracking Facebook in Global Markets

Check out the top headlines and insights this week from Inside Social Games – tracking all the latest developments at the intersection of games and social platforms.

Monday, October 19th, 2009

Friendster To Add Virtual Currencies
Café World (20M), Roller Coaster Kingdom (10M), FarmVille (60M) in Top 20 Growing Games This Week
Ngmoco’s New Eliminate Game Looks to Cash in on iPhone Virtual Goods
Facebook’s Redesign Screenshots Show Viral Channel Changes for Social Games

Tuesday, October 20th, 2009

Scoreloop Launches New White-Label Platform: Core Social
Having Reached Profitability, Virtual World Meez Begins MySpace Expansion
Slide’s SuperPocus App: Its Big New Move into Virtual Goods
Popular Social Games Inspire New Wave of Fan Blogs

Wednesday, October 21st, 2009

Are You G.I. Joe or Cobra, on Facebook?
Aurora Feint’s Secret iPhone Project Includes a Free-to-Play Business Model
Small Games Portal, Sarien.net, Brings Back Classic Adventures
Zynga’s Vision for the Social Web, in PowerPoint

Thursday, October 22nd, 2009

Tap Tap Revenge Looks to Stay on Top of Music iPhone Games with Third Version
Gambit, CrowdFlower Bring Online Labor to Game Payments
The Civilization Series is Coming to Facebook!
Playing Word Games with Sea Star Scramble

Friday, October 23rd, 2009

Fish World: A Big Fish in a Big Pond
More Rumors on EA-Playfish Deal: Due Diligence, Acquisition Numbers
EA’s Pogo.com Casual Games Site Gets Facebook Connect, Sort of
Social Gaming Roundup: Ning Gifts, Vivox, Zong on IMVU, Raptr
Thanks To Our Sponsors

Check out the top headlines and insights this week from Inside Social Games – tracking all the latest developments at the intersection of games and social platforms.

Monday, October 12, 2009

Fantasy Sports Made Simple (and Valuable)
Café World Hits 10M, Easily Takes #1 Spot on This Week’s Top 20 Games
Xbox Live Facebook/Twitter Addition Coming on Nov. 17?
China Bans Foreign Investors from Online Games [Updated]
Zynga Trademarks FishVille — Get Ready for a Big Aquarium Game

Tuesday, October 13, 2009

Starfleet Commander: A Smart New Strategy RPG from Blue Frog Gaming
Is EA Going to Buy Zynga or Playfish in Social Gaming Bid?
Hi5’s New Redesign: Another Big Milestone in its Gaming Strategy
Funji’s iPhone Game Gets More Social Features

Wednesday, October 14, 2009

Dungeon Fighter Opens Virtual Goods Shop
Mochi Media Makes Flash Games More Social with Facebook Connect
Inside Virtual Goods: Tracking the US Virtual Goods Market, 2009 – 2010, Is Now Available
Reef Life: A Multiplayer Fish Game From Storybook Anytime

Thursday, October 15, 2009

Vector City Racers: Online Racing for Kids
Social Gaming, Beyond the Clones
Preview: Turn It Up to 11 with Rock Band on iPhone
Social Games May Be Helping Facebook Gain More Users in Asia
iPhone/iPod Apps Get Free To Play Virtual Goods, Sort Of
Watch Inside Virtual Goods on CNBC

Friday, October 16, 2009

SGN’s Shervin Pishevar, On Virtual Goods in Free-to-Play iPhone Games
Social Advertising Optimizer Sometrics Raises $4 Million
OpenFeint – Putting Developers in the Spotlight
Using Dual-Currency Systems for Better Revenues and Engagement
Social Gaming Roundup: Zynga’s Sehgal, EA Jersey, China Revenue, and Ice-T

Facebook grew from 44 million to 50 million in Asia last month, according to our Global Monitor report, gaining six million new users over August — and mostly in three countries. The Philippines grew by 1.38 million people to 5.78 million monthly active users. Taiwan grew by nearly as many people, seeing a massive surge of 1.37 million to reach 3.32 million. Indonesia, already the largest Facebook country in Asia, grew by 1.19 million to reach 9.71 million monthly actives.

We’ve also seen a surge in Facebook gaming applications that are available in widely-spoken languages in the region, especially Chinese. As in the rest of the world, virtual farming and aquarium-decorating games have quickly become popular. In fact, developers active in the region have told us that many users are playing Facebook because of the games, and many don’t even realize that the games are not hosted and owned by Facebook.

Simulation games like these have been popular in China and other parts of Asia for years, so perhaps the most surprising part is that users are moving on to Facebook to play.

Asia-built aquarium games include Happy Fishbowl, with 12.8 million monthly actives and My Fishbowl, with around 5 million — no wonder Zynga, the largest Facebook game developer, is planning a “FishVille.” Regionally-produced farm games includes “Happy Farm” with more than 3 million monthly actives. Other popular simulation style game apps include Animal Paradise and Sunshine Ranch.

Across other parts of Asia, Facebook saw relatively less growth, although in some countries that appears due to the site saturating the population. The second-largest Facebook country in the region is Australia, with 6.93 million monthly actives: It only grew by 258,000 in September, but that means 32.2% of the country is now on the site. Ahead of the island continent, Hong Kong and Singapore saw similar growth numbers and slightly higher penetration rates.

Facebook, which makes the raw data we analyze publicly available, groups Russia, the Middle East and the Indian subcontinent in with the rest of the region. So, looking at the 20 largest countries in all of Asia, we see a number of other show up.

Not every government in this region allows Facebook — China, Iran and North Korea have blocked it, for example, so many countries either don’t show up or show falling numbers. Others, like some in Central Asia, don’t have large internet populations.

And some countries, we expect to see serious growth, at least based on regional and worldwide Facebook growth patterns, as well as anecdotal reports. Most obviously, India grew 222,000 to reach 4.27 million — 0.73% of the country’s 1.14 billion people. Indian users of Zynga’s farming game, FarmVille, for example, staged a successful protest in recent weeks to get the company to create an Indian flag to decorate virtual farms with. Other reports suggest Facebook is sucking up users from Google’s Orkut. Another country we expect to see grow is Malaysia, which gained 309,000 to reach 2.91 million last month. That’s 10.5% of the country’s 27.7 million users.

And one final note on Malaysia — and Singapore, Indonesia and the Philippines, the current home to Friendster. It seems that Facebook’s somewhat inadvertent gaming strategy could be what’s disrupting Friendster, a company that has only now decided to focus more heavily on games. Perhaps a Hi5-like refocus to gaming could give it a new boost?

Check out the top headlines and insights this week from Inside Social Game, where we track all the latest developments at the intersection of games and social platforms. Especially notable stories included IMVU’s revenue growth, a possible Playdom funding and Zynga’s Café World going from 0 to 8.6 million users in a week.

And, on a related note, get ready for our Inside Virtual Goods report coming next week.

Monday, October 5, 2009

Baseball Superstars 2010 is Odd and Addictive
Preview: Sniper Vs Sniper Online
IMVU’s Road To Riches Already Paved with Virtual Goods
Virtual Environments, Chinese Developers Among Top 20 Facebook Games This Week

Tuesday, October 6, 2009

A Playdom Funding Would Mean No Quick Exit
Mixpanel’s Real-Time Analytics Show How Social Games Grow and Die
Announcing Inside Virtual Goods: Tracking the US Virtual Goods Market, 2009 – 2010
PopCap Moves Deeper into Social Gaming with $22.5M Round

Wednesday, October 7, 2009

Friendster’s Future to Include Social Gaming Focus
Touch Pets: Dogs — Ngmoco Aims to Take Virtual Pets Genre to Next Level
FarmVille Users Grow Virtual Goods, Raise $320,000 for Charity
Habbo Owner Sulake to Lay Off 40 Employees

Thursday, October 8, 2009

Meet Plinga, Apparently Zynga’s German Copycat
Zynga’s Café World Goes from 0 to 8.6 Million Users in a Week, with Big Implications
See You at Virtual Goods Summit 2009 in San Francisco
GratisPay Announces Samwer Brothers, Holtzbrinck Funding, Social Gaming Focus

Friday, October 9, 2009

AdNectar Brings its Branded Virtual Goods to Twitter and LiveJournal
Top 20 Up-and-Coming Facebook Games: Animal Hunter, Jungle Jewels, Quiztastic
Is Appointment Gaming Where the Money Is?
Social Gaming Roundup: OpenFeint+Digital Chocolate, iPhone Gaming, FarmVille Protest, ljji Growth

Over a month ago, word leaked out that Asian market leader Friendster was up for sale. At the time, Facebook appeared to be seeing meaningful growth across Friendster’s core markets of Singapore, Indonesia, Malaysia and the Philippines, even as Friendster’s traffic leveled out or dropped off.

This observation came from Google Trends during one look we took, and from both Google Trends and Alexa in others, as well as some interesting anecdotes we’ve heard about. Today, we have more from our own Global Monitor report, in which we analyzed raw data provided by Facebook about its users. In the above four countries, along with other areas including Hong Kong, Taiwan and Thailand, Facebook has seen significant gains in recent months; in most cases, increases from a few hundred thousand users to millions.

Indonesia is now the seventh largest home to Facebook users in the world, with 8.52 million users — 8.23 million of those users joined in the last 12 months. We saw the Facebook base in the country grow by 645 percent in 2008, albeit only reaching 831,000 users by the end of the year. We heard similar stories from users in Singapore and other Southeast Asian countries in June of 2008.

The Philippines comes in at number 14 worldwide for Facebook, with 4.41 million users, up 4.20 million over the past year. Malaysia is close behind, at number 18, with 2.60 million users, 2.05 million in the past year. Singapore is at number 30 worldwide with at 1.59 million, growing by 1.08 million over the last twelve months. Thailand, on the mainland of Southeast Asia, is at number 36, with 1.13 million, 1.01 million of whom have joined in the last year.

And that’s not all. Two predominately Chinese-speaking areas are also picking up on Facebook. Hong Kong, one of the earlier markets in Asia to reach one million users, is now the 21st largest Facebook market in the world, with 2.32 million users. It rose 1.31 million in the last year. Meanwhile, Taiwan is at number 24 with 1.95 million, up 1.87 million over the last year.

While we don’t have the same detailed data on Friendster to compare with Facebook, the shift is presumably continuing one site to another. Google Trends suggests so, again. And, given the growth Facebook is seeing in predominantly Chinese-speaking parts of Asia, one has to wonder how it might fare on mainland China in the future. In that market of 300-some million internet users, local social networks continue to rule.

Founded by PayPal co-founder Max Levchin in 2005, Slide has become synonymous with the explosion of social network applications in recent years. Its properties and widgets, including popular applications SuperPoke, Top Friends, FunSpace, and SuperPoke Pets, reach over 155 million people per month on popular social networks like Facebook, MySpace, Bebo, Hi5, Orkut, Friendster, and Tagged. And with around 24 million monthly active users on Facebook, Slide is (and always has been) one of the largest application developers on the Facebook Platform.

However, unlike other top app developers, Slide hasn’t been rolling out many new applications over the last year. Instead, it’s been honing and optimizing its core network of properties, and spending a lot of time and energy tuning its monetization efforts.

On the advertising side, Slide has built a sales team with several staff in New York and San Francisco that has been driving the company’s premium integrations like branded SuperPokes or viral FunSpace videos. However, the company has also quietly been building its direct to consumer business, selling virtual currency and subscriptions that give users access to premium features. For example, each bar of Slide Gold costs USD $0.10 (the same exchange rate as Facebook Credits), and unlimited premium SuperPokes can be purchased for a USD $4.99 monthly subscription fee.

Just how important has Slide’s virtual goods business become? As of today, a Slide spokesperson tells us its direct-to-consumer virtual currency sales and subscriptions account for 50% of the company’s overall revenues.

Furthermore, given the increasing importance of virtual goods sales to the company – and that Levchin, CFO Kevin Freedman, and VP Strategy and Business Development Keith Rabois all share a history at PayPal – we’ve been hearing increasing rumors lately that Slide has plans to bring more parts of the payments layer in house in order to be able to exert greater control over the payment user experience. Today, Slide confirms that that is indeed the case.

“We believe it’s important to improve the system for paying for virtual goods. We are working on innovating that technology to make the experience easier for our consumers,” Lily Lin, Slide’s Director of Communications, tells Inside Facebook.

Whether or not Slide will make its payment infrastructure available to other developers remains to be seen. Slide’s Lin, however, says that that is “not the plan.”

“The focus is just for our own users,” she says.

For a company like Slide, which has 150 million users around the world yet connects with many of them through social network platform partners, taking greater control over the payments infrastructure, which is of increasing strategic importance to the company as it grows its direct to consumer sales, makes a lot of sense. Unlike smaller developers, it has the resources and experience to potentially establish direct relationships with payment processing companies instead of working with social application payment service providers like Social Gold, Spare Change, Zong, or Boku – or the social networks themselves. (Facebook recently started testing a payments program for developers, and MySpace has said it plans to do the same later this year.)

Overall, we think these are all smart moves by the company. Virtual goods sales are booming on the Facebook Platform, and Slide is in a unique position to capitalize on both the advertising and e-commerce opportunities inside Facebook. We’ll continue to track the company as things progress on both fronts throughout the year.