This year I started an Internet consulting practice, which has gravitated towards Internet strategy, monetization and marketing. Recently, much of my consulting work has focused on helping businesses to better monetize their websites, social media applications, and mobile device applications.
Monetization through virtual currencies and virtual goods is a topic that has fascinated me recently. Online communities have developed virtual currencies which can be purchased or earned, and then can be redeemed to buy virtual goods or services within the community. For example, a community member could purchase a suit of armor in a multi-player game, or virtual flowers to send to a friend who is sick.
Last month, the Associated Press reported that GaiaOnline.com collects $1 million per month from players buying virtual goods ranging from puppy ears to lightning bolts.
VentureBeat has reported that the MobWars Facebook application generates more than $1 million per month from the sale of virtual goods.
A few days ago MarketingVOX reported that Build-A-Bear’s online community, Buildabearville.com, might save the financially struggling company which posted a $2 million net loss for Q3 earnings.
Today I finished listening to the audio book “Play Money” by Julian Dibbel. This book chronicles the story of a Wired magazine author who becomes enamored by massive multi-player online games (MMOs), and his attempt to make a full-time job out of selling virtual goods from the game for real-world cash.
Online communities have been criticized for years due to the increased difficulty of monetizing through advertising sales. Virtual goods and services provide a much more effective way to monetize these online communities than advertising sales. For example, Last month Adotas.com said that Facebook’s virtual economy will be worth more than $100 million in the next twelve months.
A few weeks ago, I attended the Virtual Goods Summit in San Francisco and was shocked by the number of attendees who are making a living by selling virtual goods. I believe that virtual goods and services are the best way to monetize many online communities.
Posted on October 24th, 2008 by admin
Filed under: Monetization, Online Communities, Social Networking, Virtual Goods, e-Business
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