One venture capitalist, Jeremy Liew of Lightspeed Venture Partners, says yes. He puts the market for virtual goods on Facebook at around $35 million a year, more than double the annual estimate he made in January. The estimate is based on several assumptions and some basic math around the fact that Facebook creates a fixed number of each type of gift and displays how many are left when sales reach a certain threshold.

If he’s correct, the virtual-gift revenue is still a relatively small piece of the site’s overall revenue, which comes largely from ads. Facebook CEO Mark Zuckerberg has said the closely-held company — which says it now has 100 million users world-wide — expects to generate between $300 and $350 million in revenue this year.

There’s no doubt that gift-giving is a popular part of the sharing and showing-off that happens on Facebook. Advertisers have taken notice. Some, like Vitamin Water, are paying for Facebook to distribute a limited number of free branded gifts that users can show off on their profiles.

Users can also buy and send gifts – which range from hand-cuffs to unicorns — for $1 (some are free). They’re displayed on the recipients’ profiles along with the names of the senders, which can also be kept private. Users can also see which friends have recently received gifts through a “feed” feature that keeps track of what their friends are doing on the site.

For now, users pay by credit card. But a new payment system Facebook is working on could make sharing even easier and allow third-party developers to sell virtual goods to Facebook users as well.

Digital corn-dog, anyone?

–Jessica E. Vascellaro

The 90-second ad is basically a showcase for Seinfeld’s observational humor and Gates’s penchant for self parody. Gates is buying a pair of shoes at Shoe Circus, where he is a platinum member of the clown club. Seinfeld, who is eating a churro, walks by. Hilarity ensues, and then in the ad’s closing moments Seinfeld asks Gates if Microsoft is ever going to make our computers “moist and chewy like cakes so we can just eat them while we’re working?”

And that’s it. No mention of Vista, no mention of Windows.

We suppose the ad makes Microsoft seem less stodgy and uptight, which is the image Apple’s Mac vs. PC ads paint of the company. But we can’t see this going a long way towards reversing the popular impression that Vista is buggy and unnecessary. The ads would probably have to, you know, mention Vista to do that. What do you think?

-Ben Worthen

Businesses are doing their outsourcing Dylan-style

That’s one of the findings in the Black Book of Outsourcing, a comprehensive survey of outsourcing practices at 5,000 businesses by Scott Wilson and Doug Brown. For years, the conventional wisdom about outsourcing has been that businesses try to cut costs by sending tech work that used to be done by in-house staffers to firms in lower-wage countries, principally India. But businesses are becoming frustrated with so-called offshore outsourcing, according to the survey. While 82% of businesses surveyed said they were satisfied with “sameshore” outsourcing (the industry has adopted several absurd terms to describe where work is done in the wake of the offshore boom ) only 33% were satisfied with offshore efforts.

“A lot of folks were comfortable taking the work to India, but it turns out they’re even more comfortable taking the work back,” Wilson tells the Business Technology Blog.

That doesn’t mean businesses will start sending more work to outsourcing companies based in the U.S., however. Instead, the desire to have work performed closer to home, which is largely attributable to the need to communicate with the people doing the work, has led to what Wilson calls “reverse outsourcing” – companies based in India opening up offices in the U.S. Indeed, the Indian companies that were ranked near the top in Wilson’s and Brown’s survey – Wipro and Satyam – both received high marks for marrying an offshore back office with a front office based in the U.S. The company that ranked the lowest, Infosys, received a D- in this category.

One area of outsourcing that seems immune to this trend: infrastructure management. Businesses seem happy to let overseas workers monitor their networks and make sure that tech equipment is processing data at the right speeds. The reason, says Wilson, is that infrastructure management is largely automated, so communication isn’t as big a deal. “It’s low touch,” he says. “There isn’t a lot of interaction.”

-Ben Worthen

Trying to play an online game can be frustrating if there is no one else around

That’s why Dennis Fong, a former professional computer gamer and serial entrepreneur is launching Raptr.com, a startup whose service is entering a public beta test Thursday. The company does what social-aggregator sites such FriendFeed do for more normal folk–help gamers keep track of what their friends are doing, what online games they are playing and discover new games they might like.

Otherwise, finding fellow gamers can be a hit-or-miss process of logging on to multiple gaming sites, or social networking sites like Facebook and Twitter. Raptr is “kind of like FriendFeed for your gaming activities,” Fong says. “How else do you figure out what else is out there?”

Gamers create an account on Raptr and hand over identifying information from networks such as Xbox Live, and they can quickly learn what friends are online and what games they are playing. Besides console and PC games, the service tracks some 2,000 different games on the Web that are based on Adobe Systems’ Flash format–an increasingly popular waste of time for those of us who hang out in offices all day. In case some of your friends are not yet on Raptr, the service also updates a user’s game-playing status on Facebook and Twitter.

Besides opening up to the public, the company Thursday also is announcing that it has raised $12 million in funding from the venture capital firms Accel Partners and the Founders Fund.

-Christopher Lawton

Image: Jez Arnold via Flickr

Someone needs a copy of this book

The misfiring, so to speak, was reported Wednesday by AdAge.com. Though Carat’s information-technology department pulled back the memo, Ad Age obtained a copy and ran it with the story. (Which brings us to business-technology lesson two: Once a piece of information hits the Internet, there’s nothing you can do to bring it back.)

The email contained a PowerPoint presentation and a Word document intended to help senior managers break the news of the layoffs to affected employees. It also contained talking points for dealing with the aftermath of the layoffs and for informing clients.

Sure, this also wasn’t the first time a worker copied his or her whole company on an email by unintentionally, but this one sure is a doozie. And while it’s important to, you know, send your emails to the right people, there must be some technology to prevent such mistakes? How about having IT install a prompt into workers’ email programs asking anyone who clicks the send to all button if they really mean to put out a mass email? Certainly this would help managers who need to exchange proprietary information over the Web sleep better at night. Readers, what’s your best strategy for protecting emails from misfiring?

-Sarah E. Needleman

Tech departments will be able to roll out software this fast

One of the biggest trends in the corporate-tech world: individual workers finding software that can help them accomplish their goals without involving the IT department. This is in part because there are now a myriad of tools available online free of charge that are designed to help workers share information, perform analytics or manage contacts. But it’s also because workers have grown frustrated with IT departments that take 18 months to act on a request. It’s a nightmare scenario for many businesses that have to comply with different regulations or to handle sensitive data.

Microsoft is trying to reverse the trend. The software giant is getting ready to release “desktop-virtualization” software, which allows tech departments to deploy software without ever installing it on workers’ computer. The software instead runs on tech equipment within IT; workers – who are none the wiser – still access it from their PCs, but are in essence running it inside a protective bubble managed by IT. This makes it possible to roll out software without testing it for incompatibilities with every other piece of software in a business, Scott Woodgate, a director for Windows at Microsoft, tells the Business Technology Blog. And that saves a lot of time.

Hardware virtualization, which made it possible for one server to run as efficiently several servers, was the hit technology of 2007 because it helped IT departments save time and money. Microsoft is hoping that its new software does the same thing for the desktop. Desktop virtualization isn’t a new idea, but there aren’t a lot of businesses doing it yet, according to Woodgate. Microsoft hopes its new software, which is the first desktop virtualization software from the company that’s passed a Microsoft security check and can scale to meet the needs of a large business, will change that.

Our question: Is it too late for IT to earn back the favor of workers? Many people – OK, we – stopped asking IT for help finding new software ages ago. Heck, there’s a whole generation of business-software startups counting on workers to choose their own software.

Obviously, there are some types of software that workers or departments don’t sign up for on their own. But generally speaking, we think that horse has already left the barn.

-Ben Worthen

Only you can prevent unhelpful tech projects

The finding comes from a new survey by the Society for Information Management, which asked around 300 IT execs about their top management concerns. IT and business alignment – industry talk for making sure that the projects an IT department pursues match what a business needs – came in number one, a position its held in five of the last six annual surveys.

“You would think that with all the smart people in IT positions it would move off the list,” Jerry Luftman, a professor at the Stevens Institute of Technology and the person who conducted the survey, tells the Business Technology Blog. It’s still there because IT departments are trying to do it on their own. This is impossible to do – or at least success is only ever fleeting – because the business is always changing, says Luftman. In order to have anything resembling long-term alignment, the business has to be just as committed to keeping in tune with IT as IT is with the business, he says. Otherwise IT will be stuck playing catch up.

A couple other notes from the survey:

* IT departments may be through the worst of the economic downturn. Whereas last year reducing cost was the number-four priority, this year it’s dropped to number seven. Strategic planning climbed five spots – from eight to three – showing that tech execs are focused more on making do with what they have than making cuts.

* One place tech execs may have already made cuts: their staffs. Last year, attracting new talent was tied for the number one concern. This year, it dropped to number four. Retaining workers was the other concern that shared the top spot and this year it’s dropped to number eight.

-Ben Worthen

Google’s Web browser may be ahead of its time

Google let the world know about its new browser in a 38-page comic book detailing technical features and the strategic reasoning behind the new browser. Spiderman it ain’t. For those who don’t want to slog through it: Most of today’s Web browsers were designed before things like online software were common. Google decided to build a new browser with these tasks in mind, with the idea being that if there’s a browser that can run complex Web-based software then people will be more inclined to write complex Web-based software.

The bigger question: Will developers write the kind of software that Google’s browser is built for? That’s where we hit the chicken-and-the-egg problem. Developers want to write more sophisticated Web software, but they also want people to use their stuff. Yesterday Chrome had 0.0% of the browser market, and by the end of the week it will barely be in the low single digits. Microsoft’s Internet Explorer 7 is the most popular Web browser, with 47% of the market. The second most popular: Internet Explorer 6 with 25%. IE 6 was released in 2001 before many now-popular Web software was even a glimmer in some entrepreneurs eye. Clearly there’s a large chunk of the population that isn’t clamoring for the latest and greatest browser.

The best summary we found was written by Hank Williams, a software developer and blogger. “All I know is that for me, as a writer, Chrome is a fun story — as a developer, not so much,” he writes. “As a developer, Chrome is very much a story for the next decade and has nothing to do with my 2008 or even 2009 challenges. In fact it will be a cause for celebration if I care at all even in 2010.”

-Ben Worthen

The new service is available as part of Google Apps Premier, a set of online word processing, spreadsheet, email and other productivity tools that it sells to businesses. (There’s a free version of Google Apps that anyone can sign up for but it doesn’t come with the video feature.) The videos can be embedded in Websites or in files and shared with colleagues. Businesses will be able to store online about 300 minutes of video per year with the service.

Our question: Will workers really watch these videos? Google’s YouTube service is popular because people find entertaining clips, like babies laughing, old Saturday Night Live videos that haven’t been removed yet, and the Star-Wars Kid. Does anyone really want to watch a sales video or an HR exec talking about the expense-report policy?

A Google spokesman agreed that the feature won’t be his company’s most popular if that’s all a business uses it for. He tells us the real potential is for individual workers to film something interesting and put it online on their own – a bottoms-up approach, as opposed to the top-down one epitomized by training videos. Someone could film instructions for how to read a spreadsheet or post a video highlighting a new way to use a product.

We’re skeptical. Obviously, there’s no harm in adding a free feature to Google Apps. And some businesses might rush out and buy the stuff because they hear all the buzz about online video and don’t want to be left behind. But for the short-term future, at least, we suspect that this will share the fate of so many corporate social-networking and online projects: languishing because a business thought that workers were interested in a technology and not the things they do with it.

-Ben Worthen

Will workers come up with videos this entertaining?

How much information did the Best Western hacker get?

There’s no dispute over some of the facts: A cyber criminal managed to install a piece of malicious software called a keylogger on a computer in a Best Western hotel in Germany. The keylogger recorded the credentials that a worker there used to access the chain’s central reservation system and then sent that information to the criminal. The criminal then used the credentials to access the customer information.

But that’s where the stories diverge. The Sunday Herald, a newspaper in Glasgow, reported that the criminal made off with name, address, credit-card number and other information about every customer who stayed in one of Best Western’s 1,312 hotels in continental Europe since 2007. Kong says that the thief made off with 10 records, which is quite a bit less.

“This is analogous to someone compromising a log-in to a bank account and concluding that every account at the bank was breached,” says Kong. Best Western’s systems are configured in such a way that hotel workers only have access to information about guests staying at their property. He says that records in the system are purged seven days after a guest departs, and that reservations made directly through a property are not stored in the central system. Because of these safeguards, the number of records the criminal could have accessed was only 115.

Best Western’s investigation found that the criminal used the username and password three times, Scott Gibson, the company’s chief information officer, tells us, and Best Western was able to determine exactly which records the criminal saw. No other systems were accessed and no other computers had the keylogger installed on them, according to Mr. Gibson. Nor was there any sign that someone stole eight million records. “Getting that amount of data out of a system is not something that happens without evidence,” says Gibson.

The article’s author, Ian S. Bruce, said in an email that he stands by his story and that the Sunday Herald plans to publish a response soon. He included in his email two screen shots that Gibson confirmed are of the hotel’s reservation system and a customer record.

Best Western’s decision to openly challenge the Sunday Herald story isn’t as straightforward as it seems. There were 449 publicly disclosed data breaches through the first eight months of 2008, according to the Identity Theft Resource Center, a non-profit which helps identity-theft victims. Most people probably can’t name more than a couple.

Even Kong says that people have become immune to stories about data breaches. The number of calls to the hotline that Best Western set up for those seeking more information about the breach – 100 the first day, dropping to 20 later in the week – is evidence that the public was willing to look past this one as well.

Talking about the breach reminds people that the hotel chain’s system was breached and 10 of its customers are now at risk of identity theft. Still, says Kong. “We have a reputation to protect. Our whole brand promise is based on trust.”

-Ben Worthen