Facebook Determined To Make Twice As Much On Gifts This Valentine’s Day

Virtual gifts are definitely becoming a huge trend for many social networks these days - and a huge trend that can actually generate amazing revenues for the networks. Facebook is one of the pioneers of the trend and one of the networks that enjoys huge success with virtual gifts.

In February, 2007 the social network introduced virtual gifts - small digital pictures representing some cute objects that can be sent to friends as birthday gifts or on any other occasion. Friends can demonstrate the gifts they have received on their profiles. Some virtual gifts are free to send but there are others, premium gifts, that cost $1 each. Users quickly realized that this low-cost way of expressing warm feelings to someone on a special occasion is something they are prepared to try and pay for - so it is no wonder the business of letting people send $1 gifts to each other reportedly generates $30-40 million a year to Facebook.

And today it looks like Facebook has figured out how to make this business even more profitable by introducing the wrapped gifts that can be sent to people as many as 7 days in advance. Of course the explanation is very romantic and fitting the Valentine’s Day mood: you can send a person a virtual gift in advance and it will appear on their walls under wraps until the 14^th of February. The receiver will know that you have sent a gift and will enjoy two surprises: the first one when he or she gets to know that you care enough to send a gift and the second one on the day you specify the gift should be unwrapped.

But to me this entire idea looks like a very smart business move overall. Just before the Valentine’s Day Facebook lets everyone send romantic virtual gifts to people in advance and these people will know that they have a gift from a friend. So how many of such people will want to reciprocate and send a gift in return? I have a feeling that quite many will be more than willing to send something romantic as well - at least not to look rude because of not sending back a gift when it is only $1 anyway.

Of course some people would have exchanged virtual gifts on Facebook anyway if their affection towards each other is actually mutual. But there are other people who would never have thought that the other person cares about them enough to send a gift - and the feeling of appreciation will make them reciprocate with a gift as well. So while this move will not double the revenues for Facebook as not everyone will want to reciprocate and also some people would have sent gifts to each other everyway but this will certainly add some extra revenue to what the social network would have earned without stimulating mutual giving of gifts. And who knows what type of revenue boost it will mean for this year’s holidays season later in the year. This social network may be overpriced, of course, but some of their business ideas are so solid I can’t help but admire them.