Freemium was once the law of the land, but in the past year we’ve seen major moves towards infrastructure development to support virtual goods and other alternative streams of revenue. Sevral social networks have turned to virtual goods, including Facebook, hi5, and myYearbook. But we haven’t heard much in th way of the success or failure rate of recent initiatives.
This week, myYearbook released some metrics regarding its own successful implementation of virtual goods and other forms of alternative revenue-generation. Between its new subscription-based VIP Club, virtual goods and a CPA platform that ties in with its virtual currency program, myYearbook is reporting an increase in revenue of 120% from 2008 to this year, keeping myYearbook in the black.
The VIP Club is the umbrella of myYearbook’s virtual goods trifecta, giving users the ability to pay a subscription fee, buy points directly or earn virtual currency through participating in branded advertising campaigns. It speaks to formats of advertising that have long been suggested as ways to earn money through online markets, but the industry hasn’t really put too much stock into direct transactions with its users since social networking and the freemium model took hold during the resurgence of the web economy. Now that social networks are forced to seek out additional money-making methods outside of display ads, a great deal of development has been poured into other forms of targeted advertising and virtual goods.
We’re also seeing second tier networks such as myYearbook and hi5 become much more aggressive in their approach towards virtual goods, enticing advertisers, developers and users alike. With a reported 33% of myYearbook’s revenue coming straight from its virtual goods projects, things are looking promising. How the platform approach to direct transactions and the virtual goods economy will play out is yet to be determined, but we’re feeling our way through new developments and finding optimal ways of providing value to all parties involved.
What will also be curious to see is how much virtual goods economies on less populated sites such as myYearbook has an effect on Facebook and MySpace’s take on virtual goods. Both of these larger social networks have adopted virtual goods, and Facebook is the most likely to be able to establish standards towards virtual goods. But in terms of directly benefiting from a virtual goods market, Facebook is still working out the kinks.
Have you checked out myYearbook’s VIP Club, and how do you feel about virtual goods as a sustainable way to earn money on social networks?