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Scrapblog Marketplace: Virtual Goods Make Great Memories Posted: 23 Jan 2009 03:04 PM PST Another web-based company is going the route of virtual goods. Scrapblog, the online tool for creating, sharing and printing scrapbooks online, is soft-launching the Scrapblog Marketplace this weekend with a full release scheduled for Monday. What does this marketplace provide? Additional digital content from companies and designers in the scrapbooking industry through a series of stores. Premium content will include things like specialized backgrounds, stickers, badges, and more. Users will need to purchase credits which can be redeemed in exchange for the extra goods. It makes sense for Scrapblog to start charging for more premium features and “accessories,” if you will, especially as this is how physical scrapbooking retailers make their money. Not only will this provide additional revenue for Scrapblog but it extends a wealth of features and montization options to end users, brands and designers. It’s a method that many have used in the past, from photo-editing and sharing sites like Picnik to virtual avatar services like Meez. I would even go so far as to say that the new Scrapblog Marketplace is akin to what we’ve seen from Animoto’s video-creation service, in that Scrapblog is now establishing an entire forum for designers and those already in the industry to provide their creativity in exchange for monetary rewards. The a la carte model that Scrapblog is going after here works with the principles of the long tail approach and also reflects the attitude we’ve seen a number of web-based services take in regards to a growing need for revenue without a heavy reliance on advertising. That doesn’t mean that advertising can’t be a factor in Scrapblog’s Marketplace, given Scrapblog’s promotion of popular companies’ content along with designers’ content for use in the Marketplace. This makes the Marketplace an opportunity for more engaging advertising, and I imagine some cross-service and cross-network potential for sharing an organic presence within the social media space is a somewhat attractive lure to many brands out there. Scrapblog already has a Facebook app connecting content from your Scrapblog account to be ported onto your Facebook profile. Align the new Marketplace with some of these cooperative applications and advertisers may find even more ways in which to insert their campaigns accordingly. But as I mentioned before, an established Marketplace for a prominent media-sharing site like Scrapblog could become a great platform for independent designers wishing to sell their work directly to Scrapblog users while earning revenue for their work. This doesn’t seem to be an option just yet, but as I imagine having a system similar to Minted could work well with the Scrapblog demographic it’s good to hear that Scrapblog is planning on a more open marketplace later on down the line.

Will hi5 Virtual Goods be the Real Billion Dollar Idea? Posted: 23 Jan 2009 06:31 AM PST hi5 entered into the virtual currency space late last year, and it seemed like an all around good move for the social network. Having now delved into the world of virtual gifting, enabling easier virtual exchange was achieved by the offering of hi5 Coins, which can be applied to a great number of things representing supply and demand through the network in this sense. So where does that leave hi5 in the grand scheme of social networks? VentureBeat seems to think that virtual gifting could be he jackpot for hi5. There are a few reasons why this could be the case. For starters, virtual gifting offers an opportunity to create some revenue and a business model beyond advertising. It seems like a no-brainer, given the necessity to create multiple streams of revenue for a good portion of web-based companies, along with the success of other virtual worlds and virtual gifting systems seen in the U.S. and in several Asian countries. What could be considered a web 2.0 social network in countries like China or Japan means that a service often comes at a premium, as the advertising market doesn’t sustain a web-based company as expected in the U.S. And the reliance on advertising dollars is shifting in the U.S. as well. As the market has led to layoffs, a decline in venture capital and budget cuts across advertising campaigns, many web-based companies have turned to charging for premium services even more readily than before. Finding a way to easily fit that into an existing social network can be beneficial for companies like hi5 to not only stay in business but to grow as well. Growth could eventually lead to dominance, and this is likely a goal for hi5. On a global scale, hi5 is among the more prominent social networks, and virtual gifting makes it that much more competitive with the likes of Facebook, MySpace, Friendster and Bebo. As virtual goods continue to be a booming business, there’s no reason for hi5 to not get in on the act. What we’re left with is a ready potential for an entire marketplace to be launched around a single network’s currency. This is something Facebook and MySpace have been talking about for years, and it’s something that’s already been well established in virtual marketplaces like Second Life and Habbo. Moving a virtual currency beyond virtual goods, however, merely expands the potential of a given social network to become a centralizing economy for third party applications, services, direct sales and marketing, and user-generated buying and selling. Having an ubiquitous platform by which to achieve such a centralized economy is something many companies have gone after, including Yahoo and eBay. hi5 has taken steps in this direction by enabling users to donate to Kiva through its network, and the possibilities beyond this are endless. Having such a platform supported in a cross-network sense, however, is an issue likely to be tackled by a third party developer. It’s the cross-network potential I’m interested in exploring, for the expression and exchange of virtual goods and even services, though this may not come any time soon. We’re still struggling to see a cross-network cooperation that encourages a seamless experience for end users, though we’re working towards this in many ways, laying the groundwork even more for virtual goods to become a viable alternative to the direct advertising model.

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