Facebook Gifts May Bring In Additional Revenue
September 28, 2012

The Gift That Keeps On Giving – Facebook

Michael Harper for redOrbit.com — Your Universe Online

Make no bones about it, Facebook wants nothing more than to be the virtual representation of your everyday real life. The Facebook profile is already a virtual representation of each user, complete with a timeline of one´s significant life events, a page full of likes and possible dislikes, and photo albums detailing one´s life. These users can also use Facebook´s virtual currency, buy apps and even use their profile as a virtual key to gain access to a number of apps and services, such as Spotify. Facebook even has plans to become the go-to place for search, giving users one more reason to never leave their site.

Now, Facebook is even trying their hand at becoming an e-seller, taking their once virtual gifts into the realm of reality.

If this move is successful, Facebook could begin to encroach on the territory of Amazon, the world´s largest online retailer.

Facebook is launching this service as a way for people to give real gifts to one another to commemorate special events, such as birthdays, new babies, new jobs or what have you.

“Every day, millions of people share special moments with their friends on Facebook by saying "Happy Birthday," "Congratulations," or simply, "I'm thinking of you." Now there is another way to celebrate those moments,” writes Facebook in an introductory blog post.

According to this post, giving a gift is easy. Simply click on the familiar Gift icon on a friend´s timeline, select a gift from one of Facebook´s suggested items, choose a card, then pay and complete the order. Judging by the description, it might be difficult to give a surprise gift, as Facebook will send a message to the recipient, letting them know they have a gift on the way and asking them to verify their address. Similarly, if the recipient doesn´t like the color, shape, style or even kind of gift they´re receiving, they´ll be able to make all these changes before payment goes through and the gift is shipped.

Such a process could be seen as either a clever way to dance around the potentially awkward situation of gifting someone the wrong size or wrong color gift or as a needlessly complicated process for a simple gesture.

Facebook´s venture into this uncharted territory is not only an expansion of their brand and services, but also a way to bring in more revenue. The latter is becoming increasingly important to a company whose stock has continued to disappoint its holders ever since the company first went public early this summer.

Like any retailer, Facebook gets to keep a little profit from the back end, making money with every gift transaction, the amount of which depends on the gift. With nearly 1 billion users, the earning potential for Facebook will always be there if they´re only able to persuade these users to jump on board. According to Reuters, this mass of users might not be so keen on spending money at Facebook.com, as market researchers have found the majority of these users prefer Facebook to be a social service instead of anything else. Facebook, of course, wants to change their users´ minds.

“People already use Facebook to communicate with their friends and share all of their life moments,” said Lee Linden, the product manager in charge of the new gifts feature.

“Gifting is just a natural extension of that behavior. It makes a lot of sense for us not to just say ℠Happy Birthday´ but to send a gift, not just say ℠I love you´ but send some flowers.”

Gifts began rolling out to American users on Thursday and are available from a few retailers, such as Starbucks Coffee, Jawbone Electronics and Magnolia Bakery. These gifts range from $5 to several hundred dollars. Facebook once had a virtual gift giving service, allowing users to pay for tiny icons and send them electronically to their friends. These real gifts, according to Linden, will arrive with a customizable card and a Facebook logo.