Facebook always seems to be the king of innovation. From ad revenue, to virtual goods sales, they seem to always be more creative, and more successful than their competition. But when it comes to a gift service, I can’t see the social networking giant earning profit.
At first glance, it seems like a great idea. The convenience of gift-giving on Facebook seems apparent; all you have to do is click on a friends name on their birthday, and press “send”. But as the article outlined, there are some inherent problems.
The biggest problem would have to be the privacy. When you send a gift to your friends, they have to enter their address on the site. Facebook has been called into question on their privacy practices before. In the article, they say that Facebook’s current methods of keeping information private are “overrated”. If anyone on the internet were able to acquire your home address through this gift-giving service, consumers would have a hard time justifying its use.
It also has competition in this field, especially from Amazon. While Facebook has strength in convenience, Amazon towers over them in infrastructure. Amazon has well-built connections in shipping and distribution, which have taken years to develop. For Facebook to come in and try to compete would be a disaster. Amazon also has a much wider choice of products, whereas Facebook is limited to products such as cupcakes and Starbucks giftcards at the moment.
While I may disagree with the profit potential of Facebook’s gift-giving and “social commerce” projects, it isn’t the first time they’ve tried something new. Maybe these creative ideas are what Facebook needs to continue growing in the social networking sector.
Image Source: http://giftfind.ca/