So I have to admit I have an addiction… to the Facebook game FarmVille. Now, of course, I am always curious about the business and money side of things and the money generated by the creators of Facebook applications is no exception. The most popular apps bring in millions of page impressions and create a potential for tremendous revenue for the creators.

FarmVille is interesting for the fact that I don’t recall seeing any display advertising and upon double checking, sure enough there is none. The game appears to derive revenue solely from selling Farm Coins and Cash used for upgrading your virtual farm. While I have never paid money to add things to a Facebook app, I’m sure many people have and in turn create a nice revenue stream for the creator, Zynga.

Zynga was recently featured in The Wall Street Journal because of FarmVille’s success. The article mentions that after only two months, FarmVille enjoys having 11 Million active users and that money is earned through online advertising and in-game purchases. I’m still confused as to where the in-game advertising is though.

Adam Nash published a blog post about the economics of FarmVille which is a very interesting analysis of the inside mechanics of the game and will surely help out not only hardcore players, but newbies as well. Another more detailed economic analysis of FarmVille’s Trees was calculated by Pablo Paniagua.

The picture at the top of this post is my farm, that I have since modified and will be changing again after saving up to upgrade the size. The game is entirely pointless, however it is a great relaxation tool and a way to kill time.

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