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Facebook Moves to Monetize Mobile App

Facebook recently formed an agreement with Bango, a mobile payments company based in the UK, to enable purchases directly from the Facebook mobile app or mobile website.

Facebook has been selling their digital currency, Facebook Credits, and other virtual goods online with much success for over one year, but they will now start making these sales in the mobile channel as well. Bango, a public company based in the UK, will handle mobile transactions for Facebook and charge consumers directly to their mobile phone bills.

Although the bulk of Facebook’s revenue comes from web advertising they have made substantial revenue from the sale of virtual goods online as well. With Facebook now going public they have had to elaborate on how they earn revenue, but they have also been trying identify new sources of revenue. Facebook is now exploring ways to monetize the mobile channel even though they have had a mobile app for over one year. Facebook plans on monetizing the mobile channel in two ways: first through making sales of Facebook Credits or virtual goods just as they do in the eCommerce channel today; and second, through delivering advertisements to mobile Facebook users.

Facebook touts a large and growing number of mobile users. In September 2011 Facebook tallied 350 million active mobile users, or about 44 percent of their total monthly users, but this grew to 425 million active mobile users in December 2011, more than half of all Facebook users. With this many active mobile users Facebook stands to earn substantial revenue through mobile sales and advertising impressions.

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