By Adam Dickter / CIO Today. Updated September 28, 2012.
Virtual cupcakes, puppies and drinks are out. Real cupcakes, stuffed animals and Starbucks gift cards are in. The world's biggest social network, under pressure to generate more revenue to drive up its stock price, is now letting users send friends real stuff to celebrate birthdays and other special occasions -- even without knowing their address.
It's a big departure for a company that made billions of dollars for the last eight years without selling any tangible products. It's also a big potential revenue generator. And, perhaps even more important, it's another way for Facebook to gain control of even more private data.
"Every day people use Facebook to keep up with their friends," says a promotional video on Facebook's official Gifts page. "Whether it's to say happy birthday, congratulations or just 'I'm thinking of you.' Now there's an even more meaningful way to celebrate these special moments."
Like other Facebook features, the service is rolling out gradually, beginning in the U.S. Users will be able to click on a friend's name in the birthdays news feed, then select from a range of available goodies, with a card attached. A prompt for gifts will also appear on a user's Timeline on his or her birthday so that Facebook and its partners can profit from the big day. Facebook says there are hundreds of gifts to choose from.
Virtual giving isn't completely out: The user gets to "unwrap" a preview of the gift to decide whether to keep those Happy Socks for Women ($15), Gund teddy bears ($20), or Birthday Cookie Greeting ($5); or say thanks, but no thanks.
The giver can choose whether to pay immediately, or when the recipient accepts the offering. If and when the friend accepts, he or she picks the delivery location.
Worried about privacy? You can choose whether or not to share news of your largesse with your other friends, so your girlfriend doesn't have to know about the necklace you sent to your ex.
Since Facebook is closing in fast on a billion users (though it estimates more than 80 million of them are fake or duplicate accounts), the gift feature could turn out to be a major commercial engine, driving integration of social media and online shopping.
The potential for the network founded by Mark Zuckerberg in his Harvard dorm room in 2004 is such that analysts have even coined the term F-commerce.
"This is an important inroad into F-commerce, as well as mobile commerce," said social media and digital-advertising analyst Rebecca Lieb of the Altimeter Group.
"But as other commentators have noted, it's also a way for Facebook to get additional user data. When a gift is sent, the recipient must provide a physical address, a major data point FB does not yet have associated with its users," she told us.
"Facebook could potentially rent mailing lists, but it's much more likely they'll use physical address data to build more complete user profiles. More specific physical location information such as address or ZIP Code can target local or hyper local marketing, and are also indicators of other demographic information, such as income level."