As Facebook officially shuts down it’s store, Twitter seizes the same opportunity and opens up a viable revenue stream. As of yesterday, the Facebook store is no more, a clear indication that the social networking giant is seeking alternate routes of shopping monetization. Meanwhile, in a carpe diem move, Twitter officially launched it’s @earlybird stream that focuses on announcing one-time-only, deep discounts from selected advertising partners. In other words, something that a number of other retailers and brands do via Twitter, only now, if they want the visibility of @earlybird, they’ll have to pay for such exposure.
Facebook’s 3 year old gift shop allowed users to purchase virtual goods, or gifts, for other Facebook friends via that platforms’ virtual currency system. Typically, 10 credits cost $1, with the average virtual gift costing anywhere between 20-30 credits, thus making that virtual birthday cake cost a few bucks. Nothing to break the bank, but also…nothing that users were really interested in.
Justin Smith from Inside Facebook estimates that the Facebook Store made up less than $10 million in revenue for the Palo Alto, CA based social network. In contrast, venture capital firm Lightspeed Venture Partners pegged the Store to pull down around $35 million in revenue back in 2008.
So now that the Store is closed, what’s with the credits? Perhaps (most probably) a foreshadowing of things to come, Facebook users may continue to purchase virtual gifts from external 3rd parties, Hallmark Cards Inc., for example. Again, nothing earth shattering, but a clear indication that Facebook is eager to platform themselves as ‘the’ gateway between consumer and retailer.
Jared Morgenstern, Facebook product manager for games and credits has this to say, “While the ability to give gifts will be gone, I am proud of the impact gifts have had on Facebook. Out of the Gift Shop’s ‘gift credits’ came the virtual currency, Facebook Credits, that now makes it easier for people to buy premium items across the many games and applications on Facebook. So while we’re returning one gift, we’re replacing it with another, one that will be used to improve the experience of even more people on Facebook.”
In a world of increasing Twitter awareness and usage, the company has been struggling for quite some time as to how to monetize their product. Taking a look around the retail landscape of today’s internet, the Twitter crew may have just found the porridge which is just right.
Building on the intense reactions and interactions Twitter allows consumers to have with their favorite brands, the company has launched it’s own brand of the retail experience: @earlybird.
“Many of you use Twitter to stay on top of timely, relevant information, and lots of businesses are already sharing special offers on Twitter,” Twitter said in introducing the @earlybird account. “We believe that surfacing deals through the @earlybird account will help you discover the best of those deals, as well as find and follow accounts that consistently provide exceptional value.”
Other than that, we don’t really know too much more about @earlybird, as it’s still very much in it’s infancy. Twitter did say that initially, the offers will be large, international brands, or US market focused. Down the line, Twitter says that the plan is to further localize and specialize the service, meaning that shoppers can chose which offers they’ll see, and which they won’t.
Now, the really interesting thing here would be if the two were to sit down at the table together, and hammer out a way for shoppers to be alerted of a special offer, click through to said offer, and then pay for the item with Facebook credits. Or is it all just getting a bit too Orwellian? Time and consumer behavior will tell….