Friday, February 19, 2010

Facebook and PayPal co-development of the virtual goods market

U.S. e-commerce giant eBay's PayPal online payment platform will work with the U.S. giant social-networking site Facebook, and through the latter's social networking Web site for virtual goods transactions online payment system in order to jointly develop this huge potential market.

The two sides reached in accordance with the non-exclusive agreement, the advertising firm is also able to use the PayPal payment platform to buy advertising on Facebook, which is exactly the main source of profit for Facebook.

Currently, Facebook allows its users to the system through a virtual currency to buy cup cakes, teddy bear and other aircraft or a virtual gift, and presented to their friends, their essence is the use of a fake currency. Facebook users are currently using a credit card to buy these items, but as Facebook reached an agreement with PayPal, customers can also through the latter's payment platform to buy these items.

As Facebook has not yet public offerings, so the company does not publish its transactions from the virtual goods received by a specific income level. At present, the virtual item trading has become a fast-growing high-value area, and still have great potential.

BGC Partners analyst Colin Gillis said the deal will effectively promote the PayPal business. According to his estimates, Facebook's virtual goods trading market could reach 1 billion U.S. dollars. Gilles said: "This is a big market, and its profit margins may be very high."

Osama Bedier, vice president of PayPal, said the present case, the global online market, the total size of items in the three billion to six billion U.S. dollars between, and the market's annual growth rate of at least 50%. At present, Bei Dier in charge of PayPal's platform and the new technology and so on.