Facebook's New Gifts Service

Facebook, as most of you know, is a social networking site that has a vast user base. With over 950 million users worldwide, it is the largest social network and has people who almost have an addiction for it. Most people first log into Facebook and look for messages and posts on their walls even before logging into their e-mail accounts. The age restrictions are happily being flouted, and the only requirement is a valid email ID which serves as the username as well.  The only other thing you need is a secure password which you can create yourself, and you are through. You are encouraged to invite acquaintances and make friends and the friendships spread geometrically.

The colossal web space required must be costing a pile, though you don’t directly contribute towards this or any other establishment costs Facebook undergoes. It is true that there is great potential for ad revenue and Facebook did initiate an apps program that was somewhat of a success. People need to pay a flat fee in order to use an app on Facebook. However, that does not seem to be enough and Facebook has now come out with a new idea in the form of Gifts Service.

Are they trying their hand at e-commerce the way Amazon and eBay are doing? You never know, with such a vast user base, if even a small percentage gets converted it adds up to mind boggling figures. Maybe the revenue from advertising is not up to their expectations. Maybe there is pressure to get more revenue which is prompting them to turn to the huge, untapped potential from the user base that is increasing by the day. What exactly is the Gifts Service all about?  It’s quite simple, users can now log into their accounts and exchange gifts with other members through Facebook.

There are millions of teenagers and even preteens (though officially they do not have the permission to become users) constituting the user base. Facebook expects quite a few of this crowd to start using their Gifts Service in a big way to ensure that this behemoth can keep going at the same pace, if not at an increased one. It is proposed that Facebook will use an Android app to make this Gifts Service accessible. This is to be followed with an iPhone app shortly. Exchanging gifts online is really convenient and suits people who are loathe to stepping out to select, buy and send a gift.

Anniversaries and important dates flashing on your memory at the last moment is no longer a cause for concern. Shopping online for a gift and having it delivered to a friend is now so easy that a lot of people are simply going to love this convenient option. If the recipient is already a member on Facebook it makes it even simpler. The entire exercise can be taken care of with mere clicks of a button. This could even increase the user base rapidly as those who are not members already will hasten to sign up and existing members who wish to gift non member friends will try to induce them to sign up.

Facebook is probably planning to use the services of a gift giving company called Karma that it recently acquired. The news about the Gifts Service itself was enough to marginally push up the declining share price that was hovering in the $20 range which is less than half the value of the 52 week high of $45. Whether Facebook justifies its recent IPO with more such revenue generating gimmicks remains to be seen.


This guest post is brought to you by Chad Bauer of timewarner.wedocable.com, a site that offers savings and current information on getting internet service.