Maybe Facebook’s big future isn’t in advertising at all. Maybe Facebook, which is currently testing a PayPal-like “pay with Facebook” payments system, will make all its money getting between Web vendors using Facebook Connect and consumers that want to pay with one click. Certainly having 200 million monthly active users gives the social network a good start.
If it happens, watch out, PayPal (EBAY).
Here’s the relevant bit:
Recently Facebook launched a couple of alpha tests for its payments service with application developers. How important is payments to the future of Facebook’s monetization goals? My (and others’) estimates show that a payments service might add just a few per cent to Facebook’s revenues today.
I think it has the potential to be really important. Its potential correlates with how valuable it is to developers and users. There’s a bunch of things that we test as a company, and we basically choose what to invest in based on what people are doing. I don’t really have anything new to add to the information that you already have on this.
But based on how our tests go, w
e may choose to do a lot more. We’re pretty optimistic [about the potential performance of the payments service], but we don’t really have a sense of how big it will be yet either. I do think it is one interesting area.
Do you think that the majority of those transactions will happen within Facebook.com, or on other websites through Facebook Connect?
Well, I think the whole system is decentralizing. The idea of Facebook Connect is really that it’s the evolution of the Platform.
The idea was never that we would have these boxes inside the site. That was a good way to get started, but the idea is that eventually there should be thousands and thousands of applications built on the web, desktop, and mobile. Those will be the ones that handle most of what people are doing.