Facebook Integrates PayPal, Targets International Advertisers

By Jessica E. Vascellaro
February 18, 2010
http://bit.ly/Facebook-Integrates-PayPal

Facebook said it would allow consumers and advertisers to 
buy ads and virtual items via PayPal, a move aimed at boosting 
its international business. 

Facebook hopes the move will make it easier for small companies 
in countries such as Germany and the Netherlands, where 
credit card use isn’t prominent, to run advertising campaigns on 
Facebook. The social-networking site said no money changed 
hands under the partnership, which is essentially a technology 
integration. 

Generating business from international advertisers is a pressing 
priority for the company. Currently, 70% of Facebook’s more than 
400 million users live outside the U.S. Many of them are in countries 
with relatively small online advertising markets or where merchants 
and consumers are more comfortable paying with their bank accounts 
than credit cards. 

“As our business has grown, offering local methods of payment 
has become increasingly important for advertisers who want to 
buy Facebook Ads,” said Dan Levy, Facebook’s director of 
payment operations, in a statement. 

In a statement, Osama Bedier, PayPal’s vice president of platform 
and emerging technology for PayPal, highlighted the eBay unit’s 
broad international footprint, which covers 24 currencies in 
190 markets. 

The partnership comes as Facebook’s revenues grew by more 
than 70% in 2009. Last year, the company became cash-flow 
positive, meaning it is taking in enough cash to cover its business 
expenditures. 

Facebook said it would also allow people to purchase its own 
“Facebook Credit” currency through PayPal. Currently, users 
must give Facebook their credit cards to purchase the credits, 
which they can spend on virtual gifts for other people. They can 
also spend the credits on items made by businesses that build 
software for Facebook, such as gaming companies.