Web 2.0: Ning does Virtual Gifts and Demand Media does healthcare

October 20, 2009

With the Web 2.0 conference about to kick off in San Francisco, Internet start-ups are unveiling new products and tossing out crumbs of data about their businesses intended to illustrate how fast they’re growing.

Social-networking firm Ning led the charge on Tuesday with the news that it has grown 300 percent year-over-year to 36 million registered users and that it is jumping on the virtual goods bandwagon.

The company said it will begin selling virtual goods across the 1.6 million specialized social networks that exist on Ning for $1.50 per gift. The company said it will split 50 percent of the revenue with the Ning network creators who offer the goods on their respective networks.

Virtual goods are increasingly catching on as an attractive revenue stream for Internet companies.

Zynga, the hot videogame maker for social media services like Facebook, said it raised $427,000 from three weeks worth of virtual goods sales on its FarmVille game, according to the Silicon Alley Insider.

Still unknown is Zynga’s annual revenue, which has been estimated to be between $100 million and $200 million in some media reports, but as SAI notes:

By telling us that some of its 59 million monthly FarmVille users spent $427,000 on just one product of the many available in just three weeks (annualized, the number is $7.4 million), Zynga is sending a very clear message: Yo! People really are spending lots of money in our games.

Demand Media, the company co-founded by former MySpace Chairman Richard Rosenblatt, also had some growth metrics to share.

The company, which comScore now ranks as the 15th most popular U.S. online property in terms of unique visitors, said its library of originally produced content is set to surpass one million unique items (from how-to articles to videos) this week and that it now has streamed over 1 billion videos on YouTube.

Demand Media also said that freelancers who produce content on its sites can now get affordable healthcare. Demand isn’t actually paying for anyone’s healthcare, but it says that by pooling together the freelancers on its payroll it was able to negotiate healthcare packages at rates that cost about half of what it would cost someone to purchase health insurance individually.

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