While we all know that the ‘traditional’ advertising market has been taking a beating over the past few months, according to a recent Insidefacebook.com survey, social applications and games monetizing via direct or indirect payments has been less affected.  While a number of analyists offer up their opinions and site the entertainment industry’s traditionally strong performance during economic downturns (more free time and the increased desire for diversions) or the overall attractiveness of a low cost purchase (vs. buying that new car), Facebook applications developers have or have not (depending on how you look at it) been hit by the current economic state.

Facebook application payment providers in particular are reporting tremendous growth at a time when more and more businesses are looking at closing up shop.  Although no specific names or figures were named, Insidefacebook.com reports that overall, payment providers have seen on average a 35% growth in overall transaction and associated dollar volume rise over the Q1 2009, with some even reporting as high as 300%, due in part to new distribution partnerships.

And while a majority of these numbers are flowing from facebook, payment providers also reported that the demand for virtual currencies across other social networks (MySpace, hi5), mobile platforms (iPhone) and in online games in general have also spiked.  Consequently, developers large and small are reaping the benefits of this demand.  Zynga for example, one of the largest app providers on Facebook and MySpace is rumored to be pulling down quarterly revenues in the $10-$15 million range, while Playdom, the developers of MySpace’s #1 game is reporting similar numbers.  And obviously, for every major developer, there’s 10-15 smaller developers standing right behind it, working on their own unique application segment.  What does this all add up to?  Besides positive reinforcement in an area that’s been traditionally flogged as the black sheep, these types of numbers are making big waves in Silicon Valley, and VC’s that weren’t currently watching the space, sure are now.

But wait…isn’t facebook rolling out their own virtual currency?

In German, there’s a perfect word for this: Jaein, which is a combination of Ja, meaning yes, and nein, meaning no.  As we’ve previously reported, facebook has been flirting with the microtransaction/virtual currency tree for quite some time now, but have yet to make a full commitment to the project.  They have however taken great steps in the right direction, and perhaps even started introducing users to the concept (think Facebook Credits), the company still remains focused on growth over monetization.  Both devs and publishers of facebook applications would find a facebook currency advantageous, a number of them are also quick to point out that not even facebook themselves would be likely to deliver better services than a number of 3rd party payment providers.

All in all, while virtual currency monetization is obviously something we’ve been working on for quite some time here at fatfoogoo,  a revolution definitely seems to be afoot and we’re quite happy to be able to answer that all important question, “Can you?”  our answer?  “Yes we can, how soon would you like to get going?”

Find out more about fatfoogoo’s social networking monetization packages by visiting our solutions page.