Sachin Rekhi

2008 saw an explosion in virtual currencies and their associated virtual goods all across the internet. With Facebook social game Mob Wars suspected of making a million dollars a month and Zynga rumored to have made $50 million in revenue in 2008 off of its social and iPhone games, companies are seeing real revenue from this burgeoning monetization model. Even other indie social game developers like Mobsters and Lil Green Patch who also monetize virtual currencies have seen huge success with 13M users on MySpace and 5.9M monthly active users on Facebook, respectively. To top it off, over $580 million was invested in virtual goods related startups in 2008.

While social games is the newest category of apps monetizing virtual currencies, MMOs like World of Warcraft and Second Life have had vibrant virtual economics for years. In addition, casual MMos like Gaia Online, Habbo, and IMVU have also built thriving currencies.

Yet the most recent trend that is fascinating to me is the incorporation of virtual currencies in non-gaming sites. As growth in the online advertising market continues to deteriorate, sites are seeking alternate forms of monetization to wane their dependence off ads. Many eye the robust gaming virtual currency revenue stream and are eager to expand its success into non-gaming environments. With Facebook itself estimated to have made $30-$40 million from its virtual gifts, many others hope to imitate and expand upon such early success.

Given this, I decided to put together a quick case study of five of the most interesting virtual currencies in non-gaming sites today.



myYearbook, a teen oriented social network founded by two high school students in 2005 with now over 4.4M US uniques, is a popular destination for socializing, meeting new people, and entertaining yourself.

myYearbook has incorporated their "lunch money" virtual currency into every aspect of their experience. Even when a new user first creates an account, they are awarded lunch money for simply uploading a profile picture and inviting their friends to join. Wherever possible, myYearbook attempts to offer you additional lunch money for additional activity across the site. By getting high scores in flash games on the site, you are awarded lunch money. For winning popularity battles, you are granted additional lunch money. myYearbook has even built their own rendition of Friends for Sale called Owned. Users acquire points through the game but also spend points to purchase their friends. You can also acquire points through various offers as well as direct payment options ranging from credit card, to mobile payments, to PayPal.

Once you have acquired lunch money, you have a variety of ways to spend your currency. In addition to buying your friends in the Owned game, you can purchase additional top friends slots to showcase your friends on your profile. You can also purchase a pimped out mp3 player and more songs for your playlist. Or battle super votes to ensure you win battles or support your friends. They have even built a Causes application, allowing you to contribute lunch money toward world causes like hunger, global warning, save the rain forest, and more. myYearbook then converts your contributed lunch money into hard cash that they contribute to the appropriate charities.



Heysan is a mobile web-based IM aggregator allowing users to easily connect to MSN, AIM, ICQ, Yahoo, and Gtalk on the go from their phone.

Similar to myYearbook, Heysan initially offers up "coins" for simply joining the service and inviting your friends. Heysan also provides additional coins for performing actions on the site that they want to encourage, including daily sign-in, validating your phone number for SMS notifications, or filling out your profile. You can also get additional coins through various offers and direct payments.

What's cool about Heysan is how you can spend your coins. They can be used to get exclusive emoticons, new buddy icons, wallpapers, photo backgrounds, background colors, profile font colors, friend gifts, feature profiles, and more.



Scrapblog is the easiest way to create stunning multimedia online and print scrap books. With over 2 million registered users, media partnerships with Disney, Discovery, and Photobucket, and a newly raised round of $4 million, Scrapblog is poised for success.

Scrapblog has traditionally monetized through printing and sponsored promotions. However, they have recently introduced the Scrapblog Marketplace, which allows you to purchase premium content for your scrap book with Scrapbook "credits" that are purchased with a credit card.

These credits are used to purchase anything from new backgrounds to specially made stickers for your scrapblog. A variety of premium designers have put together an expansive selection of exclusive content for your scrap booking needs.



Dogster is the premier social network for a man's best friend. Showcase your own animal, browse your friends dogs, and check out the half a million dogs already captured on the site.

Dogster has monetized through advertising sold through their own direct sales team targeting the $42B pet industry as well as a premium subscription service for $20/year that provides benefits including the ability to upload more pictures, photo captions, ad-free browsing, and more.

In addition, Dogster has monetized through its own virtual currency, known as zealies. Dogster provides a variety of free ways to acquire zealies. You get some when you join. If you give them more info about yourself, they'll award you more. Sometimes you get them from games and other times they give them away for holidays. They try to rotate a variety of free ways of acquiring zealies. You can also acquire zealies by purchasing them at a rate of 20 zealies for $5 through Paypal. Users can additionally get monthly zealies through the paid subscription service.

Zealies are then used to purchase a variety of gifts for dogs across the site. Gifts include rosettes, which are one-month lasting ribbons you can give to your favorite dogs to recognize them. Then there are a variety of holiday related gifts. They even have sponsored gifts, including a recent Febreeze branded collar that was given away for free and paid for by the advertiser.



Mahalo recently launched Mahalo Answers, a Q&A service similar to Yahoo and Google Answers.

The interesting twist for this service is that besides users answering questions for free, the question asker can also offers Mahalo Dollars to the best answerer. This Mahalo Dollars virtual currency can be funded through PayPal. The question asker then awards the tip to the best answer. The users who receive Mahalo Dollars can convert it back to real cash after they reach a minimum amount of tips and after Mahalo takes it 25% cut.

Mahalo has also created a points system, allowing people to acquire points for answering questions well and adding friends. As a user acquires points, they progress through multiple belt levels, with higher belts designating that you are more of an expert in the community.

Resources

• Inside Facebook: 10 Tips for Monetizing Social Traffic Through Virtual Currencies
  
• Venture Beat: Virtual Goods Starting to pan out for Facebook Game App Developers and not just the Venture Funded Ones
  
• Virtual Goods News