jump to navigation

Facebook’s digital goods revenue $50-60m sources say November 12, 2008

Posted by jeremyliew in digital goods, facebook, gifts, virtual goods.
trackback

In September, I estimated that Facebook’s digital goods sales were on a $35m revenue run rate. Silicon Alley Insider quotes an anonymous insider to say:

Facebook’s revenue this year will be about $265 million, the source says, which is less than the $300 million expected. The source estimates that this is composed of about $180 million of ad revenue, $50-$60 million of virtual gifts, and some smaller revenue items.

I was in the ballpark!

Comments»

1. Andrew Chen (CoNotes Founder) - November 13, 2008

Question: How do you think the economic contraction will affect the virtual goods market?

I assume virtual goods fall under two types:
1. goods as part of a virtual game/world
2. virtual gifts

I would think personal spending on virtual goods will fall, as they typically come from a person’s discretionary account. I could see an argument that virtual goods (and the games/worlds they are a part of) are similar to movies, but movies tend to do well in recessions because they are an inferior substitute for more expensive family-time activities, while virtual worlds/gaming are typically solo activities.

For virtual gifts, do they become a low-cost replacement for more expensive, physical gifts? I would think no matter how many virtual teddy bears a boyfriend buys for his girlfriend, they don’t really come close to being a substitute for the actual item. Also virtual gifts have very low value and utility. So I would think people would be very price sensitive to purchasing virtual goods, and the market will also be negatively affected.

2. Must be a Big Ballpark!! - November 13, 2008

.

3. Reuben Steiger - November 14, 2008

Jeremy :

Seems about 2x bigger than what I’ve heard bandied about.

4. The Valley’s Next Source of Funding? Nigerian Scam Artists | TekPopuli - November 15, 2008

[...] these will have on the latest social networking sites, web, Facebook, and iPhone applications, (or if they will start their own blogs), but one thing’s for sure: all early adopters should [...]

5. 100+ Tools and Resources For Making Money Online | Host in the Shell - November 18, 2008

[...] Facebook’s digital goods revenue $50-60m sources say « Lightspeed … [...]

6. Can Virtual Gifts Monetize Location-Based Social Networks On Mobile? — GPS Obsessed - November 28, 2008

[...] Gift-giving on Facebook and other social platforms is nothing new.  Facebook opened a Gift Shop in February 2007, and since then over 60 million gifts have been given.  Many are free, but many people will pay $1 and up for these gifts.  In fact, Lightspeed Venture Partners‘ Jeremy Liew estimates that Facebook gifts have a $35 million run rate. [...]

7. What could Facebook do to increase its digital goods revenue - increase Opportunity. 1/3 « Lightspeed Venture Partners Blog - February 4, 2009

[...] around $35m in digital goods sales. In November anonymous insiders suggested that it was closer to $50-60m in digital goods sales. That’s a healthy run rate, but I think Facebook could make a few product changes to do even [...]

8. What Could Facebook Do to Increase Its Digital Goods Revenue? - February 10, 2009

[...] around $35m in digital goods sales. In November anonymous insiders suggested that it was closer to $50-60m in digital goods sales. That’s a healthy run rate, but I think Facebook could make a few product changes to do even [...]

9. How Facebook, and Twitter should monetize | Dull thoughts in a sharp world. - March 15, 2009

[...] Additionally, virtual gifts are approximately 1/5 of Facebooks revenue.  Surprisingly, an estimated $50 to $60 million is made from Facebook virtual [...]

10. How Facebook, and Twitter should monetize - The Rentwiki Social Rental Search Blog - June 3, 2010

[...] Additionally, virtual gifts are approximately 1/5 of Facebooks revenue. Surprisingly, an estimated $50 to $60 million is made from Facebook virtual [...]

11. Revenue data and other metrics of virtual asset sales market | VERN - September 29, 2011

[...] Facebook’s digital goods revenue $50-60m sources say @ Lightspeed Venture Partners [...]

12. Can Virtual Gifts Monetize Location-Based Social Networks On Mobile? by GPS obsessed - January 14, 2012

[...] Gift-giving on Facebook and other social platforms is nothing new.  Facebook opened a Gift Shop in February 2007, and since then over 60 million gifts have been given.  Many are free, but many people will pay $1 and up for these gifts.  In fact, Lightspeed Venture Partners‘ Jeremy Liew estimates that Facebook gifts have a $35 million run rate. [...]


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 26 other followers

%d bloggers like this: