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Facebook gifts and becoming the largest affiliate on the net

By October 4, 2012No Comments2 min read

I haven’t written much about Facebook or social media in a while, because frankly it bores me and its over-covered elsewhere. However the new Facebook gifts product intrigues me. If you remember a few years back Facebook had this product called gifts, in which you’d pay $1 or so to send a virtual gift to your friends. They mothballed this a few years ago, but it was their first foray into widespread e-commerce, and if I recall correctly was generating $50-100M/year in revenue (big then, peanuts now).

Fast forward to today, and Facebook is relaunching “Gifts” but with real stuff this time. So why am I fascinated by this now? Well now it isn’t some stupid virtual gifts, its real life tangible objects and cash value items. With a billion users, Facebook could eventually be the largest ecommerce platform out there (in theory).

Not only is Facebook now going to be able to have your home address as well as all the other nifty data they already have about you, they will be able to pair it with buying patterns as well. So Gifts might end up being a $500M/year or more revenue driver for them (10% bump in gross revenue), the data play could end up being worth much more long term. Think of this as another piece in Facebook’s strategy to interweave itself in the entire web. Facebook is going to power social in ecommerce web wide. If Facebook makes this a 1-2 punch and pairs web-wide transaction processing with it (think google checkout) then they could be taking a slice of a huge transaction pool.

In case you were wondering, feel free to send me gifts through Facebook (I will happily take Starbucks gift cards or amazon credit 😉 ) I won’t mind 🙂