LOLapps And The Whitelabel Future Of Virtual Gifts

LOLapps's whitelabel virtual gifting software has quietly made countless Facebook users into licensed Facebook developers. As part of the process of using the LOLapps virtual gift store creator to create your very own virtual gift apps, users actually provide the same credentials that professional Facebook developers do. API keys just let LOLapps help control the way the application works on behalf of the new virtual gift store's developer. LOLapps claims their virtual gift creation app makes them the single largest app developer on Facebook with 44 million monthly active users who are truly unique.

"Zynga claims 40 million but that's not unique, they just add up every unique user in every individual application. If we did it that way we'd be at 300 million," says Kavin Stewart, CEO of LOLapps. "We're into virtual goods as well, we have this network of virtual gift applications and we can make our own premium goods that people can pay for using Offerpal or Super Rewards."  

According to Stewart, LOLapps began its foray into whitelabel app creation with its quiz creator application. The idea of a virtual gift creator came about when one of the current executives received a virtual gift and saw the "long tail" potential inherent in virtual gift development. Right now LOLapps monetizes the virtual gifting app primarily through a combination of ad sales and paid sales of premium virtual gifts. Currently LOLapps doesn't let users pay directly for the virtual currency needed to buy a premium gift, though. Instead, users are asked to accept Offerpal and Super Rewards offers instead.

LOLapps's whitelabel technology is powerful enough that some major brands have used it to set up their own virtual gift stores, though Stewart says at this point it's not something LOLapps monetizes through. Brands like Coach who built virtual gift stores using LOLapps's technology are really no different to them than any other customer, though the company is considering taking steps to turn branded virtual gift store support into a future revenue stream.

The main issue with doing more corporate outreach is that it would require LOLapps hiring a sales force, which would itself be a major expense for a company that's already so profitable that it hasn't yet begun selling its virtual currency for real money. Stewart says that right now the company doesn't consider itself mature and is mostly concerned with rolling out new apps and monetizing quickly. For those purposes, it finds the advertising and ad offer support perfectly adequate. LOLapps is in fact so profitable that it hasn't used any of the $4 million in venture funding it accepted from Polaris in September and doesn't anticipate needing to seek out future rounds.

LOLapps is definitely a company to keep an eye on, especially given how dramatically the Facebook app ecosystem is likely to evolve once Facebook has gotten its official Credits virtual currency platform into the mix. Its whitelabel approach to letting users generate multiple apps from its product is perfectly suited to Facebook's virality. LOLapps's next big project is a whitelabel text RPG generator that would let users make their own Mafia Wars clones, though the project is early enough in development that Stewart wasn't ready to talk about it. Given the popularity of professionally made Mafia Wars clones, though, it's safe to say that a text RPG generator could ultimately have a huge impact on the Facebook social gaming scene.

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