mark pincusAlthough best-known for sucking in about 70 million people to become online farmers and crop-growers in its Farmville game, Zynga has also started using virtual goods to raise money for different social causes. The company launched a “Sweet Seeds” initiative last fall, in which users can purchase special sweet potato seeds and send 50 percent of the proceeds to two non-profit organizations in Haiti. The program ended up raising more than $1 million for children in the country.

“It opened my eyes to the potential of social gaming and how we’ll see virtual goods raise amazing amounts of money for great causes in a scalable way,” said Zynga CEO Mark Pincus on-stage at the Crunchies Awards ceremony tonight.

Every year, Silicon Valley’s biggest blogs (including us) put together the Crunchies, an event where the tech community puts the spotlight on the best entrepreneurs, startups and investors. Pincus’ full comments are below.

Michael Arrington: You’ve raised $220 million and you’re the undisputed king of social games. So a lot of people want to hear your advice and your thoughts on the future of web. What can the rest of the Internet learn from what you’re doing?

Mark Pincus: I think there’s such huge potential for us to take what happens on Facebook across the rest of the Internet. You come across these social breadcrumbs that lead you to some serendipitous place. From a marketing and business standpoint, there’s an opportunity for the kinds of growth that we’ve seen in social games to happen on smaller web sites. This isn’t about games. I think the kinds of mechanics that are in our games will be part of the way you build a great interactive experience on Techcrunch, eBay or anywhere else. Those mechanics can also drive more people to find out about you and derive revenues from users.

Arrington: Does that mean a small site can give up on AdSense and make more money from social?

Pincus: Yea, if you think about it, you don’t get a lot of advertising value from the nature of your audience. If you slot an ad network in — for example, like Fred Wilson, he doesn’t get a whole lot of value despite the socio-economic level of his audience. He could make more money.

Arrington: How much time a day do you spend playing Farmville?

Pincus: Last week, I was so caught up in redecorating my farm, I literally missed an appointment.

Arrington: More people play Farville than live in the U.K. It’s twice the size of Canada. Last question, tell me about What have you accomplished and where is it going?

Pincus: We wanted to experiment with the idea of social virtual goods. We experiemented with ASPCA-branded virtual goods. We found that people that wouldn’t normally participate would buy them if it went to a cause. We went from a test to full-scale deployment with Sweet Seeds for Haiti. It opened my eyes to the potential of social gaming and how we’ll see virtual goods raise amazing amounts of money for great causes in a scalable way. When you’re in a social environemnt, there are different ways you build social capital. What is the ROI we’re spending in five minutes on Facebook or in a game. There’s a potential for to expand the number of people engaged in virtual goods. I hoep the industry totally rips off that idea and takes it everywhere.

Arrington: What are Zynga revenues?

Pincus: Uh, let’s see.

Arrington: Thank you very much.