Facebook Inc is in talks to let developers sell virtual goods within mobile web browsers, as part of an effort to generate more revenue from smartphones and tablet computers, according to three people familiar with the matter.
The change would let developers use Facebook’s currency, called Credits, on mobile applications accessed over the web, according to the people, who asked not to be named because the talks were private. That means Facebook could get about 30 per cent of revenue generated by the sale of virtual goods. Right now, that commission typically goes to Apple Inc or Google Inc because they run the operating systems for phones.
The discussions are part of Facebook’s efforts to revamp its mobile strategy, helping the company take advantage of the shift to smartphones and apps. Facebook is one of the most popular mobile apps on Apple’s iPhone and Google’s Android, though it makes no revenue from the programmes.
In a statement, California-based Facebook declined to comment on any plans for mobile Credits. Developers of Facebook apps make money when users buy virtual items within their programmes—say, a pony in Zynga Inc’s ‘FarmVille’. When customers make those purchases using Facebook on a computer, the company gets its cut. When it happens within the apps of Apple or Google, Facebook doesn’t.
HTML5 STANDARD
Facebook is asking select developers to build versions of their applications for the emerging HTML5 web standard, the people said. This provides a way to render graphics and animation through a Web browser without having a user download software directly to the device through Apple or Google’s application stores. The TechCrunch blog previously reported on Facebook’s HTML5 efforts.
Facebook, which has more than 750 million users, makes most of its money from ads. It’s likely to generate more than $2 billion this year in earnings before interest, taxes, depreciation and amortisation, a person with knowledge of the matter had said in May. The company is valued at $72.9 billion on SharesPost Inc, an exchange for shares of private businesses.
Facebook started testing Credits in 2009, in part to diversify its revenue sources. The system lets users buy items in different games using a single virtual currency, with a commission going back to Facebook. This year, the company made Credits mandatory for the sale of virtual goods in all applications on its site. Virtual goods will be a $20-billion market by 2014, estimates ThinkEquity LLC. Spending on mobile games alone will generate $7.1 billion in sales that year.
RIVALLING APPLE
Facebook is seeking to build a software community that rivals Apple’s. That company’s App Store boasts more than 425,000 programmes, and it contributed to almost $1.4 billion in sales from Apple’s iTunes last quarter.
In another effort to help developers get more attention and make money, Facebook may include a separate news feed on its home page that displays activity in apps, three people familiar with the matter said.
