• Financial Times, Wednesday, June 3, 2009 11:45 AM

Facebook is rolling out a new internal payments system, testing it on three different applications on the site, a move that could help the social networking giant become less reliant on advertising, the Financial Times reports. The system, which is in the very early stages of development, will allow users to purchase Facebook "credits" to buy virtual goods across the social network's services and third party applications. Facebook will take a cut of every transaction.

"Over time, this will be very significant," Gartner analyst Ray Valdes says. "Social networking sites have suffered with monetizing [their services], but this leverages [the fact that] users are there on Facebook." He reckons that the Facebook payment system could soon represent one-third of Facebook's income.

Why, because Facebook users are already spending real money on virtual goods and credits on third party applications. Zynga, the site's largest developer, charges small fees for upgrades for many of its apps, and is reported to be nearing annual sales of $100 million. "Control equals revenue," said Bruce Cundiff, director of payments research and consulting at Javelin Strategy and Research. "Potentially you're looking at Facebook as a shopping portal and a source for music downloads," said Mr. Cundiff.

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