Facebook To Close Gift Shop On August 1

By On July 9, 2010 · Leave a Comment

Facebook will close its virtual gift shop down on August 1. In his blog post about the closing, Facebook Product Manager Jared Morgenstern says the shop will be closed so Facebook can focus on developing other products. All users will keep any gifts sent to them and users who've sent gifts will continue to be able to view them. Facebook officially recommends pieces of flair, Birthday Cards, Hallmark Social Calendar, and someecards to users who still want to send virtual gifts.

Morgenstern cites Photos, News Feed, Inbox, Games, Comments, and the "Like" button as features that will get more development focus once the Gift Shop closes. He helped launch Facebook's Gift Shop back in 2007 alongside Will Chen, with Susan Kare designing the gifts. Morgenstern specifically attributes the development of Facebook Credits to the Gift Shop initiative. Inside Facebook has estimated that Facebook made less than $10 million from direct sale of virtual gifts in 2009.

Although Facebook does not specifically cite Credits as a product it wishes to focus on to the exclusion of Gifts, it is widely speculated that this is actually Facebook's plan moving forward. The argument goes that Facebook has a much greater revenue opportunity in Credits through its 30% transaction fee, though Facebook continues to state that it does not expect Credits to be profitable for the company for several years.