CrowdFlower's Virtual Pay for Digital Purchases

Amanda Dorsey has spent dozens of hours categorizing search results on (EBAY), verifying search-engine links, and doing other online jobs. Dorsey doesn't get paid in legal tender. She takes her wages from San Francisco employment agency CrowdFlower in the form of virtual money, with which she buys virtual goods: a gray winter coat and a sexy yellow doctor's uniform for her avatar—her virtual self—on, a chat and game site. There's nothing odd about it, says Dorsey, a 28-year-old unemployed writer and editor in Florida. "Doing work for virtual currency is pretty much like any other form of putting forth an effort for a reward," she says.

Dorsey is one of about 100,000 people in CrowdFlower's on-demand workforce who have taken pay in virtual rather than real dollars, says Chief Executive Officer Lukas Biewald, who also pays with the real stuff. Virtual cash can be used to buy seeds or weapons to play FarmVille, Mafia Wars, or other popular games on social media sites like Facebook. Players accumulate virtual money by earning points within a game or by converting real dollars into pretend currency. Consumers will spend $1.6 billion on virtual goods in the U.S. this year, double 2009's tally, according to investment bank ThinkEquity.

CrowdFlower's twist is offering gamers a way to do real work for their fake living. It pays to place help-wanted ads within such games as FarmVille, created by Zynga. People who answer the ads with companies that have online tasks to dole out are then placed by CrowdFlower, which gets compensated by those companies in real, green money. Biewald says he expects to pay virtual wages worth about $1 million this year, compared with less than $50,000 last year. "We're just scratching the surface," he says.

CrowdFlower pays on a per-task basis, at a rate set by the companies that hire it to find workers. One client is PeopleBrowsr, a consulting firm that monitors comments about brands on social networks such as Twitter. The firm uses CrowdFlower to find workers to sift through as many as 40,000 tweets an hour and categorize each as positive, negative, or neutral. Workers typically get about 1 cents a tweet, or the equivalent in digital currency, says PeopleBrowsr CEO Jodee Rich.

Biewald says demand for virtual rather than real wages skews young: "There will be a whole new generation of kids growing up who won't really see the difference."

The bottom line: Employment outfit CrowdFlower is paid real money to staff online jobs, and often pays people in virtual scrip.

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