The venture capitalist Bill Gurley has an insightful post on why virtual goods will emerge as the economic engine for many kinds of online companies, especially those with a community aspect, like gaming, and social networks. In How to Monetize a Social Network, he points out the success of companies like China’s TenCent, which generates nearly $900 million in sales from virtual goods, and argues that if self-expression drives people to spend money on consumer brands in the real world, they’ll have the same drive in the virtual world.
Of course, Gurley’s firm, Benchmark Capital, has funded Second Life and Gaia, two worlds heavily dependent on virtual goods. But his arguments are intriguing. Do you have a virtual goods strategy for your company? Should you?
