You’ve probably heard that Facebook just hit the one billion user milestone. The company celebrated the announcement with a teary-eyed commercial and a typically understated blog post by the Zuck complete with a “one billion fact sheet.”
While the stats on the sheet are fascinating, they also bring attention back to Facebook’s biggest challenge: How can they turn that unbelievably huge data pool into real-world revenue?
Over the past two weeks, the company rolled out two new answers to that question in the form of “promoted ads” and “Facebook Gifts”, its new entry into the rapidly expanding world of digital retail after acquiring the social gifting app Karma. Now users can send their friends a lot more than hearts or Farmland invitations. It’s a bit of a twist on the DOA Facebook Deals plan: interested parties can choose from a list of products to send their friends and, in the most important update, the recipient can specify size, style, color, etc. so the gift best fits his or her individual tastes.
The big unknown right now is exactly what sort of gift selection the new feature will include.
Assuming that Facebook will only offer products from its sponsors, we can only hope that it attracts a large and varied list of companies ready to sell their wares—so far big names include Starbucks and Magnolia Bakery, but we have little doubt the list will soon grow.
So what do retail vets and other noted authorities think about the potential of this new retail project?
Diane Buzzeo, founder and CEO of Ability Commerce, says: “With its vast amount of data on its users – something most retailers and marketplaces don’t have, Facebook is making the shopping experience even more personal, and resetting the standards for how e-commerce retailers sell online. For certain types of businesses, Facebook Gifts could be very successful. No matter what industry you’re in, this is definitely something worth paying attention to.”
We appreciate the value of targeting gifts and giving friends suggestions on their birthdays or anniversaries, but just how much revenue can Facebook Gifts really bring in? And will users find it annoying and abandon it much like they have almost every other new source of revenue?
What do we think?