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Has Facebook Found an Answer to Its Credit Problems?
June 20, 2012 01:30 PM
LOSING CREDIT WHEN IT'S DUE
In the month following its public stock launch,
) has been riding the revenue stream learning curve, trying to figure out how to get its share price out of Wall Street’s crapper. A couple of weeks ago, the social network began
re-evaluating its age policy
in order to tap into the market of 50 million potential users under the age of 13. Now, a new strategy announced Tuesday on its developer blog, will have Facebook revamping its payment platform.
Beginning in July, Facebook says it will move from its current credit-based system -- that has allowed users to purchase virtual and digital goods in games and apps supported by the site -- to a
across real world, global currencies. While Facebook Credits have traditionally been available as individual, one-time payment, subscriptions will encourage ongoing payments on a monthly schedule.
“With subscriptions, you can establish a recurring revenue stream and offer updated content or premium experiences for a monthly fee,” wrote Facebook's Prashant Fuloria.
Facebook will continue pocket 30% of all revenue generated by the subscriptions, which accounted for 15% of its total income last year. The changes are not only anticipated to expand Facebook’s bottom line, but also provide game developers the ability to monetize their apps.
Social gaming developers like
) have already begun testing the recurring billing model with support for users’ local currencies. And Kixeye's is planning to offer players of its Backyard Monsters title the option to join an in-game club for $9.95 per month.
Other technology companies have been using in-app billing for some time now.
) marketplace added the feature last month to manage all monthly or annual subscriptions for music, books, and other media transactions, while
) kicked off its digital subscription service in its App Store back in February of 2011.
Meanwhile, Facebook is also making gaining some ground in the ad revenue department. What it lost in
pulling of a $10 million campaign
last month, it’s now gaining with an expanded advertising commitment from both
Facebook's Ad Strategy Finally Catches Up to Google's
No positions in stocks mentioned.
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