FACEBOOK IS planning to tap virtual farmers, Mafia dons and online pets to generate cash from the social-networking websites 300 million users.

The company is testing a payment system to gain a cut each time an online-game player buys a digital tractor, weapon or hat on the site. That would give Facebook a piece of the hundreds of millions of dollars being pulled in by Zynga, creator of Farmvilleand Mafia Wars, and Playfish, maker of Pet Society. The social-games market will triple to $2 billion by 2012, estimates ThinkEquity. "Virtual goods and microtransactions, especially inside games, can be a very big and thriving business," said Ethan Beard, who runs the developer network at Facebook. "Two years ago, we never considered it."

Zynga and Playfish, which both started in 2007, offer free-to-play titles and sell virtual goods to users through so-called “microtransactions”. They have turned Facebook into the world’s largest game portal, with more than 100 million users. By comparison, Nintendo’s Wii, the leading current-generation game system, had sold 52.6 million Wii consoles.

Facebook Credits, a payment service being tested by six outside developers, can become the “dominant payment method” on the site, where $1 billion in game-related goods and services will trade annually in three years, estimates Atul Bagga, an analyst with ThinkEquity in San Francisco.

"If you buy credits on Mafia Wars, that credit is only usable in that game," said Mr Bagga. "But if you buy 20 credits on Facebook, now you can apply those credits wherever." PayPal, the online payment system owned by EBay, charges 5 per cent plus five cents for each microtransaction. Assuming a similar rate at Facebook and the $1 billion estimate for transactions, the company could reap $55 million by 2012. That figure represents more than 10 per cent of current revenue.

Facebook, which turned profitable in the second quarter, expects more than $500 million in sales this year, according to Marc Andreessen, a board member. – (Bloomberg)