Credit where it's due
How best to turn Facebook's ten zillion users into cash has long been the topic of speculation. Two moves announced yesterday may well shed some light on the social networking giant's future direction.
Firstly, travel site nextstop announced it had been acquired by Facebook in an announcement on its home page. This seems like a logical move with location based services are poised to explode as people increasingly access the Internet on the move through mobile devices.
Facebook wants to become completely ubiquitous on the web, and enabling people to get social recommendations for any location would definitely be a step in this direction.
"This creates a number of big changes for the nextstop product and our community, but we believe it's an opportunity for some of the ideas behind nextstop to reach Facebook's audience of more than 400 million users and have a much bigger impact on the world than we could on our own," said the announcement.
At the same time, Facebook announced in a blog post that it was closing its Gift Shop, which allows its users to purchase virtual gifts for each other using Facebook Credits, at the end of this month.
Somewhat surprisingly, this feature seems to be pretty popular, with people willing to part with real money in order to present their friends with a wide variety of digital gimmicks and gestures. So initially it seems rather odd that Facebook would want to abandon this proven money spinner.
The explanation given seems a tad counter-intuitive too: "Closing the Gift Shop may disappoint many of the people who have given millions of gifts, but we made the decision after careful thought about where we need to focus our product development efforts. We'll be able to focus more on improving and enhancing products and features that people use every day, such as Photos, News Feed, Inbox, games, comments, the "Like" button and the Wall."
Even if we assume that these other products are more profitable for Facebook, that explanation would only make sense if Facebook was constrained by finite development capacity. If it needs to focus more on other projects, why not just take on more developers?
What seems more likely is that the Gift Shop is being closed in preparation for a much larger scale platform for Facebook Credits (current value 6.6p - see below). So who knows what we'll have the opportunity to buy via Facebook in future.
