The Social

With micropayments and transaction platforms a buzzworthy sector of the Web right now, it's no surprise that Google would want to get in on the game.

But Mountain View's pitch is a little bit different: the payment platform it plans to build, according to Harvard's Nieman Journalism Lab, is geared toward newspapers that want to charge for digital content.

Google's plans are detailed in a document the company sent to the Newspaper Association for America. The document, a response to a query from the association, also requested more information pertaining to paid-content models.

"While currently in the early planning stages, micropayments will be a payment vehicle available to both Google and non-Google properties within the next year," explained the document (PDF) posted Wednesday by Nieman Lab. "The idea is to allow viable payments of a penny to several dollars by aggregating purchases across merchants and over time. Google will mitigate the risk of non-payment by assigning credit limits based on past purchasing behavior and having credit card instruments on file for those with higher credit limits and using our proprietary risk engines to track abuse or fraud. Merchant integration will be extremely simple."

This is interesting, as Nieman Lab points out, because Google's plan aggregates payments into a bundle for processing, something that could potentially quell publisher concerns about transaction fees. The plan is very preliminary, obviously.

"The Newspaper Association of America asked Google to submit some ideas for how its members could use technology to generate more revenue from their digital content, and we shared some of those ideas in this proposal," according to a statement Wednesday from Google's PR department to Nieman Lab. "It's consistent with Google's effort to help publishers reach bigger audiences, better engage their readers and make more money."

Google's Checkout product, the online transaction service that would likely be the base for a micropayment system, has been around for a few years now. But it hasn't made a huge dent in far bigger competitor PayPal, and it's also been experiencing some big problems, as my colleague Tom Krazit reported Thursday.

It ought to be pointed out, of course, that Google has been the target of harsh criticism from the newspaper industry (as well as other sectors of the publishing business) for profiting from third-party content. Wall Street Journal editor Robert Thomson went so far as to call online news aggregators (not mentioning Google by name) "parasites or tech tapeworms."

Meanwhile, the payment platform that's been getting the most scrutiny and interest in the tech press these days has been, of course, Facebook's "credits" system. But while Facebook's pitch thus far has been toward nonprofits looking for small donations and game developers selling virtual goods, it's still impossible to discount the fact that Google's micropayments move could be aimed at staking a claim in the same territory.

Note: This post was expanded at 7:09 a.m. PDT. And on Friday morning, the Associated Press reported that Google was one of several tech companies, including IBM, Microsoft, and Oracle--that responded to the Newspaper Association of America request, though the AP story offered no details on those other companies' responses.

Facebook posted a set of small announcements on its developer blog Wednesday, most notably a call for alpha testers for the virtual currency platform that it's finally launching after much speculation.

"We are currently conducting an alpha test in which select applications can accept Facebook Credits from users," the post wrote. "Our 250 million users can now buy Facebook Credits in 15 currencies and we believe that, as Facebook Credits become more broadly available on Platform, they will meaningfully improve developer monetization and provide a great experience for users."

Interested developers are encouraged to contact Facebook.

Facebook has also announced that developers who want to advertise the applications they have built to run on its platform, which it originally launched over two years ago, now have a new option. They can opt to target their ad to users who are (or aren't) connected to one of their applications already: to encourage existing users to try a new app from the same developer, for example, or to court totally new users.

New options for Facebook developers' ad targeting.

(Credit: Facebook)

Huge businesses have already been built atop the developer platform: in fact, some reliable assessments have concluded that, at least for now, the apps on the platform combined make more money than Facebook itself.

You'd think, based on what the blogosphere is saying about dual sets of numbers in Advertising Age and VentureBeat, that Facebook has a new reason to freak out about revenues. Namely, signs point to the fact that the third-party developer platform that Facebook launched two years ago now collectively makes more money than the social network itself.

Well, of course it does.

From some of the headlines, you'd think that it were some sort of Silicon Valley equivalent of humans creating robots that eventually outstrip them in intelligence. While it's sort of amusing to think about Facebook CEO Mark Zuckerberg battling evil robots (cue up some Flaming Lips here), this actually should be a pretty unsurprising conclusion. Estimates indicate that the platform applications put together may make as much as $500 million in 2009, with the advertising-based Facebook pulling in $350 million to $500 million depending on who you ask. (It's a private company. They're allowed to answer that question with nothing more than sneaky smiles.)

Let's look at the latest (vague) figures. When Facebook announced the debut of its long-awaited "verified apps" program last week, the company said there are now more than 52,000 applications on the third-party developer platform--and counting. That's a lot. In other words, if the Facebook platform were a standalone business, I should certainly hope it would rake in a significant amount of money.

Granted, we'd have to crunch a lot of numbers and deal with a lot of variables in order to figure out the exact operating expenses and headcount of the platform. Some applications are created by lone developers living rent-free in a basement, whereas others are created by app development companies that employ dozens of people and pay hefty amounts of cash for office space in those trendy post-industrial lofts in dot-com-friendly neighborhoods.

It gets more complicated. Some apps are the Facebook-inhabiting arms of much bigger social media companies, or are branded advertising or marketing campaigns on behalf of corporations that otherwise have zilch to do with tech. Then there are the development firms, consultants, agencies, and countless investors who also have a stake in it. Facebook itself, last time we checked, still had fewer than 1,000 full-time employees.

Conclusion: I don't know how many people and companies can claim to be on the Facebook platform's payroll, but it's a lot. And considering the platform as a whole has been much more adventurous with revenue strategies than Facebook itself has, I should certainly hope it's been raking in the cash for some time now.

So then there's the assertion brought up by AdAge's Michael Learmonth, that Facebook is pretty much sitting on a goldmine here. Which brings back the evil-robot thinking. Once again, Facebook is dealing with a massive and extremely diverse set of individuals and companies here. Social games manufacturer Zynga may be rolling in cash, but there are loads of other apps on the platform that don't make a cent. Has Facebook let the platform get too big and too amorphous for it to wrangle decent revenues out of it? ("I'm sorry, Mark. I'm afraid I can't do that.")

Which is why there are two things to watch here. One is the rollout of Verified Apps, which may have some unannounced or even under-the-table benefits that Facebook hasn't hinted at yet. Facebook's key terms for Verified Apps acceptance are "trustworthy" and "meaningful." But I wouldn't be at all surprised if "can make money, and can help us do so, too" is an unspoken criterion. Verified Apps will give Facebook the opportunity to work closely with a much more uniform and manageable set of developers and companies who have already shown a decent degree of loyalty to the social network.

Second, there's Facebook's finally-coming-soon (or is it?) Holy Grail of revenues, which is either a virtual currency system for developers or a PayPal-like transaction platform, or maybe a bit of both. The latest signs indicate that Facebook will be expanding the "credits" system it uses for its in-house Gifts application to select developers. Beyond that, it's not clear how it will expand.

With both a potential monetization strategy in place, and a policy (Verified Apps) to keep it from turning into a free-for-all that could start eating up cash rather than pulling it in, Facebook is all set. Or, if you prefer the hyped-up version, it almost has the arsenal in place to take on those evil robots.

We knew Facebook was about to hit 200 million active users, but now it's official, per a post by founder and CEO Mark Zuckerberg on the company's official blog.

"We will welcome our 200 millionth user to Facebook some time today," wrote Zuckerberg, who's just over a month away from his 25th birthday. "Growing rapidly to 200 million users is a really good start, but we've always known that in order for Facebook to help people represent everything that is happening in their world, everyone needs to have a voice."

To commemorate the occasion, Facebook has launched a page called Facebook for Good, a page for members to share stories and experiences about how the social site has helped them give back.

It has also partnered with 16 charities and advocacy groups that have created virtual "gifts" that members can buy for one anothers' profiles. Most of the proceeds of the sale will go to the charity--Zuckerberg wrote that the rest will go to administrative costs, not to Facebook.

The partner organizations include a few longstanding names in charity like the American Red Cross and the American Heart Association, as well as newer tech-industry favorites like micro-loan start-up Kiva, shoe retailer Toms, and clean-water group Charity Water.

The campaign also puts Facebook's virtual-gift platform and "credits" system back in the spotlight at a time when, after much anticipation, the company is finally starting to make some moves in the micropayment space.

Slightly over a year ago, at the South by Southwest Interactive Festival, Zuckerberg was asked about Facebook's plans in the philanthropic space. His response was that the company wasn't yet at that point.

"I think at this point, because we're not incredibly profitable, we're not at that stage of the company--hopefully we get there--that's not really something that we can do a lot of," he said to CNET News last March. "But I'd like to think that just what the company is trying to do in general, just helping people communicate, is actually making the world better."

A year later, Facebook's revenues are up, but not as much as some critics say they ought to be. This kind of growth isn't cheap--and with 200 million users, Facebook still has a lot of work to do on the business side, not just in the feel-good, change-the-world department.

So you liked that blog post you just read--why don't you toss the writer a buck or two?

That's the rationale behind new-media outlet Salon's latest initiative. Members of its "Open Salon" user-generated content community can now "tip" one another with real-world money if they like what they see. You know, like street musicians. Popular content will also appear on the main Salon.com homepage.

Plenty of sites have instituted virtual reputation gauges (i.e. Yelp's "compliments") and a handful of amateur-content-driven media sites like GroundReport give their contributors a cut of ad revenue, but having members compensate one another is a pretty novel concept.

Salon's micropayments are handled through technology from Revolution MoneyExchange, a member of the Revolution corporation founded by former AOL czar Steve Case. Each Open Salon member who registers for Revolution MoneyExchange is given a complimentary $10 with which to start rewarding other bloggers for their stories, images, and videos uploaded to the site. But those would-be recipients can only accept the compensation if they've registered for MoneyExchange accounts themselves.

"Open Salon eliminates the gatekeepers," editor-in-chief Joan Walsh said in a statement. "It makes our smart, creative audience full partners in Salon's publishing future."

Will it work? Sure, while that free $10 is still available. After that, it's less certain. If the results of Radiohead's pay-what-you-want In Rainbows album are any indicator, Web users tend to cough up the cash when they have to and take content for free when it's possible. But on the flip side, there are plenty of people willing to pay for virtual "gifts" in Facebook, not to mention shelling out alarming amounts of real money for the in role-playing games.

And the highbrow, left-leaning Salon is a pretty civilized environment in which to institute this kind of system. If "tipping" were added to a more rabble-friendly site like Digg, well, that might spell chaos.

But the idea of this might make me inclined to write something of decent quality for Open Salon and see if I get some pizza money in return. Especially if I knew that Bill Gates were reading, or something.