Virtual Currencies Power Social Networks

CNN -- May 19 -- Currencies that exist only online are becoming a more significant part of commerce on the Web and in the real world. Some, like the hi5 Coin, operate almost like tokens in an arcade or tickets at a fair: They're a stand-in for real-world currency. Other "virtual currencies," like Second Life's Linden Dollars, however, are traded on markets. The currencies also fuel online gaming communities and are becoming an important part of social networks. Edward Castronova, a professor of telecommunications at Indiana University, says people transfer at least $1 billion into the virtual currencies each year, with most of that money going into online games. FULL ARTICLE @ CNN

This post also appears on SocialNetworkingWatch.

Comments

[Brian Balfour]

"Virtual goods and currencies aren't just a massive opportunity for games, but online dating and social networks as well. At the core, virtual goods are about expressing yourself, communicating, and standing out of the crowd in a premium way. These elements are even more important in an online dating and social networking context then in a game. Unlike advertising, it is a great opportunity for dating and social network sites to drive additional revenue while adding value to the users social experience. At Viximo we've been helping social media sites monetize with virtual goods, and have seen eCPM's an order of magnitude higher then advertising."

[Mark Brooks]

Full disclosure: Viximo is a new client of Courtland Brooks, I should note, and new sponsor of OPW.

We're learning more about virtual currency and virtual goods. QQ.com and Cyworld are the kinds of virtual currency and goods and make hundreds of millions of dollars a year off it. Cyworld failed with its launch in the USA however. But there's significant evidence that the idea is catching on in the USA now. Facebook and Hotornot are two great examples.

Said Amin runs World Singles and had a stab at virtual goods and virtual currency on his social network brainchild, Nuzizo.com.

Plentyoffish.com tried virtual goods, but was charging too much at $20 for roses. The trick, so we hear from Viximo, is to charge a couple of bucks, and to have REALLY compelling content.