Social networks making money through giving presents

Social networks making money through giving presents

Two weeks ago we ran a story about the main problem of Facebook: monetization. Dave McClure, an internet expert from the Valley, wrote an extensive post about this matter. Now Lightspeed Ventures discovered a good flow of Facebook cash: those corny digital gifts.

Facebook | Gift ShopLightspeed tracked the number of available gifts for a seven week period to better understand the sales rate of digital gifts. They excluded the free gifts, and found out that the average number of sales per week for a gift was 846. Since there were 322 different gifts available this means that 272.412 people are making other people happy with a 60 by 60 pixels birthday cake, hugging teddy bears or a freaky clown.

It’s easy to make fun of the concept, yet the numbers are pretty good. The price of a gift is 1 dollar, that implies an annual run rate of just under 15 million dollars.

My advice for European social networks, introduce this concept right-a-way. We have the euro, so you guys would even make more money per gift. Find a slightly different locally-adapted format and start monetizing. What about an (extended) cupid service on Hyves? For a few euros, the social network sends a iTunes love song to your secret love. I’m sure some users would be interested in such services.

Giving presents is an important aspect of the social discourse, so why wouldn’t the social networks make some money out of it?

[WebTipr: Yaniv Solnik, Israel]

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