Money for nothing: Sales of imaginary 'virtual gifts' approach $1 billion

Have you ever wondered who, aside from your mom, buys those $1 birthday-cake icons on Facebook? Turns out millions are willing to spend their hard-earned cash on, well, nothing. Sales on virtual items on Facebook, MySpace, and smaller social networks like Flirtomatic is expected to hit $1 billion in sales this year, a new report says.

Sales of Facebook "gifts" and virtual "goods" in games such as FarmVille are set to double from $500 million last year, according to a study by Justin Smith of Inside Network and Charles Hudson of Serious Business, and sales next year may hit $1.6 billion. Smith, who runs the blog InsideFacebook.com, says he and Hudson based the estimates on information they collected from game developers and other sources.