[qwzybug]

That's the whole problem: iAds is, to a large extent, a capitulation to the fact that in 20 years no one has figured out how to make money in online digital goods with anything other than an advertising model.

Apple has gotten the closest—I'm amazed that they haven't gotten more good press about 99c TV show rentals, as it's essentially a la carte ad-free cable, which is supposed to have been the holy Grail of video content for the last two decades—and the fact that iAds and AdMob have become so popular so quickly is a sad indicator of how difficult it is to make money by actually making something, even on iOS.

[dva]

False. Facebook is a billion dollar market driven by virtual good sales.

[qwzybug]

Sorry, should have qualified that. "No one has figured out how to make money on the Internet except by making games that people will pay not to play[1], somehow managing to sell poorly-animated GIFs for a buck as 'birthday presents' [file under thanks-but-no-thanks], or advertising."

Also note that Facebook's only actual revenue stream is ads.

[1] http://mediacommons.futureofthebook.org/content/cultivated-p...

[dva]

Facebook expects fees from credits transactions to be a significant revenue source.