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Facebook COO: No PayPal killer, ad network--yet

The company is still in a phase of experimentation when it comes to payments and transactions on the social network's platform, Sheryl Sandberg says at the Web 2.0 Summit event.

Facebook COO Sheryl Sandberg speaks with John Battelle at the Web 2.0 Summit about features we can expect from the social-networking site.
James Martin/CNET

SAN FRANCISCO--Two of the biggest rumors about big, upcoming Facebook products--an ad network and a payment transaction platform--won't be making a big splash anytime soon, chief operating officer Sheryl Sandberg said in a talk on Wednesday afternoon at the Web 2.0 Summit.

"We're asked it all the time," Sandberg said on the question of whether Facebook would be launching an ad network for external Web sites using the Facebook Connect universal-login product. "We focus on building products for users and we think about the monetization later. And I'm not saying that in a cute way, because we are very focused on monetization."

Then there are the reports that Facebook will be launching a PayPal-like transaction system or large-scale virtual currency, a rumor that's been floating around literally for years. "There's a lot of speculation on payments, and (we) don't want to fuel the speculation," Sandberg said in her talk on Wednesday. She did say that Facebook processes payments internally for advertisers buying up inventory ("We needed people to be able to buy ads internationally," she explained) and that it's playing around with the "credits" system that it uses in its "gift shop" feature.

"We are doing some testing with a couple of developers to see if they can use credits in apps they have," Sandberg said. "That's all we're talking about right now. We're in a learning phase."

Some potential customers have hinted that Facebook may have already gotten too big to deploy such a product. When asked about the idea of a Facebook payment system, John Cahill, the CEO of teen virtual-world Meez, told CNET News earlier this week that he's skeptical about its potential.

"The bigger the social network, the harder it is for a currency," Cahill said. "I've spent some time in the payments space and the real-world currency space, and rolling out a payment system that can be used by millions of people is very, very difficult. If you get it wrong, you can destroy your community."

But Facebook is dipping one toe after another into the virtual-goods pool. Earlier on Wednesday, the New York Times broke the story that Facebook would be letting members gift songs to one another through a partnership with music service Lala. This would be the first concrete result of yet another longstanding rumor of a "Facebook music service."

Additionally, Facebook has partnered with a number of nonprofits for charity-focused virtual gifts.