We’ve all seen this coming, but Facebook’s announcement earlier today that it would allow consumers and advertisers to buy ads and virtual items via PayPal, may be the latest watershed moment for Social Media.

The Wall Street Journal positions this as a move to improve International revenues, so they can “generate advertising revenue from small companies in countries such as Germany and the Netherlands, where credit card use isn’t prominent.”  Now, I’m sure that’s part of the reasoning, but it seems like there is something much bigger in store that the WSJ is missing.

The part of this that the WSJ glosses over is that, “Facebook said it would also allow people to purchase its own “Facebook Credit” currency through PayPal. Currently, users must give Facebook their credit cards to purchase the credits, which they can spend on virtual gifts for other people. They can also spend the credits on items made by businesses that build software for Facebook, such as gaming companies.”

I think this is the big deal here.  Theoretically, there shouldn’t be that much of chasm between using your credit card to make a purchase, and using PayPal.   But there really is.  With this system, now all of a sudden on my Facebook profile, I can say, “I have two Mariners tix, who wants them. Price is $80 total.”  A buyer could update my status and PayPal account simultaneously, and I can email my tickets over to them.  So all of a sudden, Facebook becomes Craigslist, but with trusted friends instead of sketchy strangers.  Sure, up to now I *could have* inserted a bit.ly link or something unnatural to the Facebook environment and allowed my profile to be a marketplace.  But with the PayPal  technology integrated into Facebook, it should be pretty seamless for anyone to sell goods or services from their profile.  

And once we get the credit cards out of the way, we blow open micropayment opportunities.  You may put a small version of a beautiful sunset picture on your Facebook page.  And if I send you $.25 from my PayPal account you’ll email me the high-res version.  It’s not paying your mortgage, but if 10 people do that, then your latte got paid for.  We could imagine possibilities for hours.

The only odd thing is that Facebook wasn’t able to build their own version f PayPal.  But since PayPal is owned by eBay, maybe this is the beginning of a tighter deal between the two companies.  Go ahead and let your brain wander around the concept of an eBay/Facebook merger…