Facebook hopes online payments plan will woo investors

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The long-awaited prospectus for its forthcoming share sale, published last night, revealed that 15% of the social network's $3.7bn revenues
last year came from taking a cut of payments that users make to Facebook app developers. All the rest of the revenue comes from the sale of ads on
users' Facebook pages.

The bulk of the $557m in payments revenue in 2011 came via one single company, Zynga, which makes the popular Facebook games FarmVille and Words
With Friends. Analysts pointed to that revelation as one potential weakness that could be seized on by potential investors who seek to drive down the
price of the share offering.

The reliance on Zynga leaves Facebook exposed if its users suddenly stop wanting to pay for virtual tractors to work on their virtual FarmVille farm, for example, they said.

But Facebook's prospectus repeatedly points to its payments system as source of large potential revenue growth, and it said it had tasked its
developers with working on ways to extend its use.

In a letter to potential investors, Mark Zuckerberg, founder and chief executive, described Facebook as a "platform" and Facebook Payments is
designed as the means for the company to take a cut of any commercial transactions happening over that platform - in the same way that Apple takes a cut of revenues to the makers of apps on its iPhones and iPads.

Mr Zuckerberg said he expected more and more businesses to use Facebook as a platform. "We have seen disruptive new approaches in industries like
games, music and news, and we expect to see similar disruption in more industries by new approaches that are social by design."

Payments integration is currently required in apps on Facebook that are categorised as games, and Facebook said "we may seek to extend the use of
Payments to other types of apps in the future".