Source: http://bits.blogs.nytimes.com/2012/11/28/how-much-facebook-might-make-through-gifts/
This is an interesting article by the NY Times, as they try and estimate how much revenue Facebook makes by their users giving gifts to each other through Facebook. They say that Facebook has 168 million users in the U.S. and the average person giving a gift through Facebook spends $25. So if 5 percent of U.S. users give a gift, that's about $200 million. If Facebook gets a 15 percent cut of that it will be about $30 million in revenue for Facebook, which is a negligible portion of their projected total revenue of $5 billion.
The article then goes on to talk about how none of the big digital companies do a great job of capitalizing on gift giving. Amazon doesn't have a great way to figure out what to buy for whom. Apple allows gift giving to friends (provided you live in the same country). So this is a huge area for Facebook to capitalize on, as not only is there significant room for growth but Facebook is uniquely positioned to capitalize on it. They know when everyone's birthdays are and people blatantly post what they are interested in.
This article really got me thinking how it is crazy that none of the big web companies have done a very good job of taking advantage of gift giving. So many people now shop online, so why not make it easier to suggest what someone might be interested in and allow them to buy it on the spot Plus, it's a great way for people to advertise what they want. This year I came across the fact that Amazon allows you to create a Wish List to let people know what you want (basically it is just a registry). So far this is proving extremely helpful for us to make it easy for my mother in-law to not only know what we want for the holidays, but to also make sure she actually purchases the correct thing since she isn't too tech savvy (you'd be shocked how hard it is for her to type the correct book title into Amazon). But despite having this functionality, Amazon doesn't really advertise it and you have to know that someone created a wish list. It will be interesting to see if Facebook finally cracks the gift giving code, or if maybe some new company comes up with a strategy and swoops in.
This is an interesting article by the NY Times, as they try and estimate how much revenue Facebook makes by their users giving gifts to each other through Facebook. They say that Facebook has 168 million users in the U.S. and the average person giving a gift through Facebook spends $25. So if 5 percent of U.S. users give a gift, that's about $200 million. If Facebook gets a 15 percent cut of that it will be about $30 million in revenue for Facebook, which is a negligible portion of their projected total revenue of $5 billion.
The article then goes on to talk about how none of the big digital companies do a great job of capitalizing on gift giving. Amazon doesn't have a great way to figure out what to buy for whom. Apple allows gift giving to friends (provided you live in the same country). So this is a huge area for Facebook to capitalize on, as not only is there significant room for growth but Facebook is uniquely positioned to capitalize on it. They know when everyone's birthdays are and people blatantly post what they are interested in.
This article really got me thinking how it is crazy that none of the big web companies have done a very good job of taking advantage of gift giving. So many people now shop online, so why not make it easier to suggest what someone might be interested in and allow them to buy it on the spot Plus, it's a great way for people to advertise what they want. This year I came across the fact that Amazon allows you to create a Wish List to let people know what you want (basically it is just a registry). So far this is proving extremely helpful for us to make it easy for my mother in-law to not only know what we want for the holidays, but to also make sure she actually purchases the correct thing since she isn't too tech savvy (you'd be shocked how hard it is for her to type the correct book title into Amazon). But despite having this functionality, Amazon doesn't really advertise it and you have to know that someone created a wish list. It will be interesting to see if Facebook finally cracks the gift giving code, or if maybe some new company comes up with a strategy and swoops in.
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