14 DAY TRIAL // Facebook is huge, there's no getting around that, there's no other social network even remotely close to in terms of users and there are few sites or online services, which can boast a similar audience. That being said, revenue-wise, it's still a small player in part because it hasn't focused so much on monetizing its huge user base. 2010 looks like the year when this changes and Facebook seems to be determined to ramp up revenue. One move that appears geared in that direction is a new partnership with PayPal enabling users but also small advertisers to use the payment service on Facebook.
“We want to give the people who use Facebook, as well as advertisers and developers, a fast and trusted way to pay across our service,” Dan Levy, director of payment operations, Facebook, said. “As our business has grown, offering local methods of payment has become increasingly important for advertisers who want to buy Facebook Ads. Teaming with PayPal, a global leader in online payments, makes this possible.”
The move is aimed more at small advertisers, at least for now, than it is at regular users. The idea is to give small companies the chance to buy ads on Facebook, through the company's recently independent ad network, using PayPal rather than credit cards that may not be a viable option on many countries.
Considering that 70 percent of Facebook's 400-million strong user base is located outside the US, there is definitely a huge market. And with those hundreds of millions of users spending many hours a month on the site, Facebook gets a lot of pageviews, which means a big ad inventory. The problem is, because of its size, ad rates are very low on Facebook, something that becomes less of a problem if it manages to scale up its advertising platform and reach more potential customers than it was previously possible. Regular users will also benefit from the PayPal deal as they will be able to buy Facebook Credits using the payment system. Credits can be used for virtual and, recently, also real gifts from Facebook's own store but in a number of social games on the site as well, though that feature is still in beta.