Facebo o ks struggles sho w the tensio n f aced by

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Unformatted text preview: ir Facebo o k pro f ile pages. Visit CNN and the site can pull to gether a list o f sto ries reco mmended by f riends.J. Valentino DeVries, “Facebo o k CEO Zuckerberg o n P lans to Do minate the Web,” Wall Street Jo urnal, April 21, 2010. Think abo ut ho w this strengthens the so cial graph. While items in the news f eed might quickly scro ll away and disappear, that data can no w be pulled up within a Web site, pro viding insight f ro m f riends when and where yo u’re likely to want it mo st. Taken to gether, these f eatures enlist Web sites to serve as vassal states in the Facebo o k empire. Each o f these ties makes Facebo o k membership mo re valuable by enhancing netwo rk ef f ects, strengthening switching co sts, and creating larger sets o f highly perso nalized data to leverage. Facebook: The Bank of the Web? Tho se with an eye f o r business disruptio n are watching the evo lutio n o f Facebo o k Credits. Credits can be used to pay f o r items, such as f eatures and enhancements in video games o r virtual gif ts. Facebo o k shares Credits revenue with applicatio n develo pers, taking a sizeable 30 percent o f f the to p f o r acting as banker and transactio n clearing ho use. That’s a steep price to pay, but a unif ied standard may also pro mpt inno vatio n since users are f ar mo re likely to trust Facebo o k with their credit card than to register their card o n multiple services run by littlekno wn app develo pers. As o f July 2011, Facebo o k Credits are the mandato ry in-game currency f o r all develo pers o n the service. There are real bucks to be made f ro m digital make-believe. Analysts estimate that in 2011, virtual go o ds racked up an estimated $ 2.3 billio n in U.S. transactio ns and $ 9 billio n wo rldwide.Zacks Equity Research, “EA’s Co mmand and Co nquer MMO Go es Live,” May 25, 2012; and M. Walsh, “Virtual Go o ds Sales Hit $ 2.3 Billio n in 2011,” Online Media Daily, Feb. 29, 2012. Zynga alo ne f o rks o ver tens o f millio ns each mo nth f o r Facebo o k vi...
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This document was uploaded on 01/31/2014.

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