Facebook is stopping its physical gifts service and expanding its web and mobile marketplace with digital gift cards.
Facebook Inc., world's largest social networking site, has shifted focus from Facebook Gifts, launched December last year. The company will soon end the sale of physical gifts and move to digital gift codes or Omni-Gift Card credit that can be redeemed in select brands and businesses.
Facebook Gifts offered an interesting range from cupcakes, mugs, flowers, to clothing from partner brands. Although the gift service is not a major revenue booster, the company kept it as a side business. Most of the revenue generated by Facebook comes from its advertisements and of late, Facebook has worked vigorously to make ads on its site more interesting and entertaining.
"Today we're beginning to roll out a new design for Facebook Gifts focused on gift cards. Since launching Gifts in December last year, roughly 80% of gifts have been gift cards," Facebook said in a statement to NBC News. "So, we're now adding more digital codes and making the Facebook Card redeemable at more merchants. As a part of this shift in focus to Facebook Card and digital codes, we're also phasing out physical gifts."
The physical gifts service accounted for only 20 percent of the revenue generated from the gift service. Digital gift cards generated the rest. Facebook's decision doesn't come as a surprise as the company is focused on generating more revenue with its services.
Facebook users can continue to gift their friends with credits to Starbucks or iTunes. The gift page will get a boost with the addition of new brands, and for the first time, an option to select from variable denominations, Facebook spokesperson told CNET.
The Facebook digital-gift card's new and remodeled look will be rolled out to only 10 percent of Facebook users Friday, followed by a global launch next week.
Alongside, the California-based company is also introducing a new Facebook card, a sort of prepaid credit card that can be used to make purchases at select merchants for a hassle free shopping experience.
