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Facebook launching virtual currency? Don't get too excited

A company representative says that Facebook has been "looking at" the possibility of building in a virtual currency, but his language was about as ambiguous as it gets.

On Tuesday night, a Los Angeles Times blog post pointed to an soundbite that Facebook "gaming guru" Gareth Davis produced at the GamesBeat conference in San Francisco: that the company is "looking at" offering a virtual currency to developers. The virtual goods industry, the article notes, is a $1.5 billion behemoth.

This would mean that games and other apps with a presence on Facebook could use a universal "Facebook currency" that would not only be interoperable between apps, it could also line Facebook's pockets with some extra cash. But Davis' language ("looking at") is about as ambiguous as it gets, so my advice to potentially-excited developers would be "don't hold your breath."

What this reminds me of is the once-hyped "Facebook Wallet." Remember that? A few months after the social network launched its developer platform in May 2007, word started to spread that it was also working on a PayPal-like payment system. Executives hinted at it on conference panels. In a high-profile move, Facebook hired Benjamin Ling, the Google engineer who had been instrumental in developing the Google Checkout product. But Ling left after less than a year at the company and returned to Google. Rumors started to spread that Facebook had scrapped the plan entirely.

Once source I talked to earlier this month in the virtual-currency space said that Facebook Wallet never came as close to fruition as some seemed to think it had. "It's not like they ditched it, it's that they never got it off the ground," the source said, adding that some developers were wary of the idea in the first place because of the extra work it would involve with little obvious benefit other than "it's easier."

I'd assume the situation would be similar for a Facebook currency of its own. It'd take a lot of development for a product that developers wouldn't even necessarily want. There is, however, a flip side: Facebook has offered virtual goods of its own, in the form of the "Facebook Gifts" that members can purchase for one another's profiles, since 2007. Late last year, Facebook switched the payment system for Facebook Gifts from U.S. dollars to "credits," making it easier for the site to charge more or less than its previous standard $1 for the virtual items.

It'd obviously be very easy for Facebook to make these credits available to developers. But Facebook's roadmap these days has shown that its focus is on the Facebook Connect component of the platform rather than beefed-up features for embeddable apps. It's also unclear whether developers would want to alter mature products to institute a new virtual currency--or whether they'd all want to be interoperable with competitors.