Virtual goods..now I'm a believer!
But anyway, this incredibly thoughtful and thorough post from Jeremy Liew covers the different use-cases for virtual goods. Why do I suddenly believe though the data to confirm this has been around for a while? Cos I was finally tempted to buy one on Facebook the other day. :)
As far as monetizing virtual gifts (as opposed to virtual goods in general) , Facebook is the most successful that I've heard of (to the tune of $15m according to Liew's analysis.)
What's even more impressive? Despite the existence of numerous completely free gift applications, which Facebook doesn't seem to be making explicit efforts to inhibit, their own paid gift app (which admittedly has some inherent advantages) seems to be doing just fine.