Virtual Goods | featured news

Zynga is poised to harvest some cold hard cash in its initial public offering. Who knew that selling virtual cows and digital corn on Facebook would create a $7 billion company?

Zynga offers free games through Facebook, then studies data on how its audience plays them. It uses its findings to fiddle with the games to get people to play longer, tell more Facebook friends about them and buy more virtual goods.

An increase in the number of people playing free games is providing the gaming industry with an additional source of revenue as gamers shell out millions for virtual goods and add-ons.

A World Bank study to be released Thursday reports that the online gaming industry has grown into a $3 billion business that provides living wages to migrant workers in Asia who play games all day, amass virtual currency and sell it to wealthy customers in the Western world for actual cash.

Social networking website Facebook is dipping into the brick-and-mortar world by selling gift cards at retailer Target that can be used toward purchasing virtual products for games hosted on the site.

Electronic Arts’ acquisition of Playfish in a deal worth up to $400 million signals that Facebook’s virtual goods economy is thriving. Meanwhile, Facebook Connect has been implemented on CNN.com, NBC.com, WashingtonPost.com, The Huffington Post, ABCNews.com and numerous other media sites.

"The Lam/Suen family was allegedly using click fraud to make more money for their site WoWMine.com—mainly by clicking competitors' ads until their competitors' ad budgets were exhausted.