• by Gavin O'Malley  @mp_gavin, July 22, 2009

Can sponsored virtual currency unlock social networks' vast moneymaking potential?

In no uncertain terms, says Scott Lynn, CEO of Adknowledge, a performance-based ad network that has agreed to acquire KITN Media, owner of virtual currency monetization platform of Super Rewards.

"We believe that what contextual ads did the for the Web, virtual currency is doing to the social Web," says Lynn. "On any given day, consumers are earning hundreds of thousands of dollars in virtual currency by signing up for advertising offers."

According to Lynn, the combined companies will account for roughly $250 million in revenue this year.

The acquisition combines the Super Rewards platform with the technology infrastructure, financial backing, and international presence of Adknowledge.

"This greatly increases the advertisers we have access to, while helping to scale our sales and technology operations," said Jason Bailey, co-founder and CEO of Super Rewards.

The Super Rewards platform helps developers of social applications and online games to offer virtual currency to consumers who sign up for advertising offers.

Consumers presently redeem the currency for virtual goods or other services in more than 1,000 social games, including virtual currency applications on Facebook.

Canceling out the need for credit cards and PayPal accounts, virtual currency is indispensable within virtual worlds like Second Life. And while it has yet to take hold of popular social networks like Facebook, that could soon change.

Facebook platform manager Gareth Davis, for one, recently confirmed rumors that the company is exploring a virtual currency of its own.

This marks the fifth acquisition for Kansas City, MO-based Adknowledge in the last two years. Most recently, in March, it bought the media division of performance ad network MIVA -- including the Miva site, Findwhat.com and Espotting brands -- for a reported $11.6 million.

"We're in growth mode," said Brett Brewer, president of Adknowledge, and formerly co-founder of Intermix Media. "In some cases, that will mean more acquisitions."

To date, other acquisitions include social networking ad platforms Cubics and Lookery; the UK and Australian divisions of ad network Media Run; and Adonomics, a provider of Facebook analytics and developer services.

Adknowledge currently partners with more than 1,200 developers to deliver banner ads on social networks through its sales operations in the U.S., the U.K., and Australia.

The company delivers more than 700 million banner impressions daily to consumers using Facebook, MySpace, and other social networking sites.

Founded in 2003, Adknowledge is funded by Technology Crossover Ventures.