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Monday, October 25, 2010

What Are Zynga And RapLeaf Really Looking For In The Facebook Profiles?

The major news outlets have been all over the recent revelation that RapLeaf and Zynga have been farming Facebook data. Guess what! This is a common practice by all sorts of companies because Facebook and a host of other social networks such as Linked-in and Tweeter(to name a few) have open API's(Application Program Interfaces) that encourage developers to pull data from these sources for use in their applications.

The news agencies have also done a poor job in determining what Zynga and Rapleaf have been looking for in the data they are pulling from Facebook. There has been some reference to improving advertising revenue. However, no specifics have been given. So what are Zynga and Rapleaf looking for and what do they intend to do with the information?

Early this year I was invited to attend and speak at a gambling conference. I made a presentation on the "Online Gaming EcoSystem" which implied that there is a natural link between social gaming and online gambling. During the Q&A one of the gambling operators indicted that Zynga was selling them leads from the Zynga Facebook poker site.

Many people, including the major news outlets, do not realize that an online gambling operator will pay from $300 to $500 per lead for an online gambler that deposits signs-up and deposits money in an account. Compare this to other lead generation businesses and you will notice that this is serious money.

The online gambling operator I spoke to indicated that Zynga was sending his company a high volume of leads. However, they were really poor. They were inadequately "profiled" and not of much use to his company.

Apparently, Zynga was listening.

Until the recent Zynga/Rapleaf publicity Rapleaf had been an obscure San Francisco startup. In fact, Rapleaf is one of a number of startup's focused on making sense out of social networking information providing "intelligence" and user behaviour analysis to companies.

Rapleaf was and is providing Zynga with player profiling information to help Zynga "monetize" its players. Yes, Zynga will also use profiling information to improve virtual currency and virtual goods revenue . However, these revenue sources are insignificant from an individual player's perspective. Clearly there is much more revenue to be gained from selling leads to online gambling operations. So much more that both Rapleaf and Zynga were willing to make a really big bet that their activity would go unnoticed.

Kevin Flood is the CEO of Gameinlane, Inc. Kevin writes extensively about online games and their impact and integration into iGaming and E-commerce environments. Kevin is a frequent speaker at online game events and conferences in Asia, Europe and the US. Kevin and his Gameinlane team are currently working with online gambling, social gaming and e-commerce companies integrating social gaming with online gaming operations and integrate game mechanics into e-commerce applications.

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