When Facebook began rolling out its redesign at the beginning of the month, there was one change that stood out - the prominent display of "Credits Balance" on the menu used to log out and edit your friends and privacy settings. We thought this might signify a change coming in Facebook and today's announcement of a "strategic relationship" with PayPal seems to confirm that Facebook is looking to move in new directions.
Facebook has made a number of changes recently, including the redesign and the revision of its advertising terms. And all of it seems to point to Facebook looking to monetize its biggest asset - its 400 million strong user base.
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As the press release states, "the option to pay with PayPal makes it even easier for advertisers, particularly small international companies, to run campaigns on Facebook". Facebook recently dropped Microsoft as an advertiser because it doesn't want to go in the direction of a small number of advertisers spending big dollars - it wants millions of small advertisers to take advantage of its advertising capabilities.
"We want to give the people who use Facebook, as well as advertisers and developers, a fast and trusted way to pay across our service," said Dan Levy, director of payment operations, Facebook. "As our business has grown, offering local methods of payment has become increasingly important for advertisers who want to buy Facebook Ads."
Facebook knows that it has the data to offer small businesses advertising that is targeted at the proper demographics and these businesses commonly use PayPal. The company will also be using PayPal to allow users to buy Facebook Credits, which can be used to purchase virtual goods and gifts.
We think that it's only a matter of time before Facebook credits become the standalone currency for a greater number of goods, both virtual and real.
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