Facebook has launched a new service that lets its users send friends real gifts via the social network. Members can send gifts from the birthday reminders link on the news feed or from a friend’s Timeline via the “Give him/her a gift” link or the present icon. Gift notifications can be posted to that friend’s Timeline or sent privately. Coming four months after Facebook’s troubled initial public offering, the feature marks the company’s attempt to unlock a potentially significant new revenue stream.
Although it has sought to diversify its income sources, Facebook still relies heavily on display advertising.
During the second quarter, more than 80 percent of its revenue of $1.18 billion came from ads while roughly 15 percent came from game-maker Zynga.
Facebook, which can store credit card data for users, will make money by taking a cut of each gift transaction.
The social network, boasting nearly 1 billion user accounts, has long viewed commercial transactions as a massive opportunity for the platform.
But marketing researchers have found that consumers have been slow to make purchases on the website because many treat it as a place to chat and post messages rather than go shopping.
Facebook hopes to change that by getting users used to the idea of giving small gifts as part of their social routine.
“People already use Facebook to communicate with their friends and share all of their life moments,” said Lee Linden, a Facebook product manager heading the 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.”
The products are only available in some U.S. cities and only to people randomly selected by Facebook to be ‘beta users’, but perhaps gives some indication how Facebook intends to evolve.
Current gifts cost $5 up to several hundred dollars for a Jambox stereo by Aliph Inc, said Linden, who joined the company in May. His previous start-up, Karma, was acquired by Facebook in a deal announced on the day of Facebook’s high-profile IPO.
Facebook had experimented with a “virtual” gift-exchange feature years ago, but shut it down in 2010. The original gifts were no more than digital trinkets, cartoon images of flower bouquets, teddy bears and even women’s underwear.
“Your friend can then unwrap a preview of the gift and it will show up on their doorstep a few days later,” Facebook said in a blog post.
Facebook said users can pay right away or add payment details later. The recipient will provide their shipping address of choice, and also select the desired colour, size, or flavour. If your choice is all wrong, they can exchange it for something of equal value.
Friends will receive notification about the gift as they would any other Facebook update.
Facebook said Gifts will include hundreds of options, like cupcakes from Magnolia Bakery, a stuffed animal from Gund, or a digital gift card from Starbucks.
The service is available here
Read the official blog post here
